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Where Are the Best Property Tax Breaks for Green Homes Around the World?

France and Switzerland among top places in rewarding environmentally conscious homeowners

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Liana Monica Bordei / Getty Images
Liana Monica Bordei / Getty Images

Every week, Mansion Global poses a tax question to real estate tax attorneys. Here is this week’s question.

Q: What places in the world give some of the best property tax breaks for green home initiatives?

A: Programmable climate controls, solar power and energy-efficient heating systems are just some of the eco-friendly upgrades available for environmentally conscious homeowners. Tax credits or deductions for these additions are available in many places around the world, with the details varying not just from country to country, but often from state to state or province to province.

Several countries do offer breaks on the federal level. France for one, offers tax credits for the installation of certain energy-efficient technologies, according to tax associate Jessica Duterlay of the French law firm ATTORNEY/COUNSEL.

More:Taxes on Prestige Properties in France Can Be Complicated

The CITE (Credit d’Impôt Transition Energétique or Energy Transition Tax Credit) is available for French residents on primary residences only, and "the tax credit does not cover the totality of the expenses paid but will be up to 15% or 30% of the amount of expenses paid," Ms. Duterlay said.

That can be up to €8,000 per year (US$9,785) from a period of five consecutive years for an unmarried taxpayer or €16,000 (US$19,569) for couples, with an additional €400 for each dependent living in the home), she added.

Switzerland also offers several tax breaks with an eye toward sustainability, according to Markus Aeschbacher, partner at HMP Hartmann Müller Partners, a law firm in Zurich.

Denmark is another country offering "tax breaks for energy-saving measures," according to Niels Thestrup of the Copenhagen-based law firm Kønig & Partners.

Renovation work that makes a home more energy efficient can qualify for a green tax deduction on both rental housing and primary residences. Deductions for these upgrades can be up to  DKK12,000 (US$1,970) per person per year.

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In the U.S., tax and other incentives for green builds vary quite a bit. But, according to the IRS website, tax credits are available for up to 30% of the cost of installing the likes of solar panels or solar heating equipment, geothermal heat pump equipment and fuel cell electricity generating equipment.

The credits are available for primary homes as well as vacation homes (except for fuel-cell equipment, which is for primary residences only), but not rentals.

The credit is good through 2019, but in 2020, the rate will drop to 26% and then to 22% in 2021, when credits are scheduled to expire.

Email your questions to editors@mansionglobal.com. Check for answers weekly at www.mansionglobal.com.