The Barnier government left us a beautiful Christmas gift which has just been brought to us by its successor. The regulations are so abundant that they sometimes go unnoticed. Indeed, it is only through an article of West France of December 26, confirmed by Franceinfothat we learned of the existence of a decree of December 4 poetically titled “relating to the nature and characteristics of energy renovation services benefiting from the reduced rate of value added tax provided for in article 278- 0 bis A of the general tax code”.
Initially, the finance bill for 2025 provided, in order to bring France into compliance with community law, that VAT on equipment and the installation of so-called condensing or very high energy performance gas boilers would increase from the rate reduced by 5.5% to the standard rate of 20%. 200 million euros were expected as a result in the state coffers (West FranceOctober 14, 2024).
Due to censorship from the Barnier government, the measure obviously could not be adopted. But that was without taking into account the possibility of moving from one reduced rate to another by means of a simple decree. This is the purpose of the decree of December 4, taken just before the fall of the Barnier government and published in Official Journal of December 24 under the Bayrou government. The decree increases VAT to 10%, as for other gas boilers, from 1is January 2025.
The mechanism is in reality similar to that planned for electric vehicles: it is a question “for the planet” of encouraging individuals to replace their gas boiler, in particular with a heat pump. But why are the French so reluctant to do so, as 40% of them, according to estimates, still heat themselves with gas (The ParisianDecember 26, 2024)? This is mainly for financial matters. Despite the flood of government aid, heat pumps cost much more on average than gas boilers. The director of the National Union of Climate Engineering Maintenance Companies explains that the “remaining cost is around €10,000 or €12,000” (France Bleu, December 26, 2024).
Conclusion: most French people will still not be able to buy a heat pump, but they will have to pay €500 to €700 more to install a gas boiler. And the bill will rise further if the legislator ends up adopting in 2025 the increase in VAT applicable to the standard rate of 20%
On the other hand, let us reassure our readers, the maintenance of the gas boiler will continue to benefit from the reduced rate. A real gas factory…
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