The VAT regime also differs according to whether the building is not yet built or is now completed. 

Land for building  / real estate asset 

Acquisitions of land for building are always subject to VAT if the vendor is a taxable person (Article 257. I 2 1° of the FTC).

Land for building in the tax sense is land that can be built on pursuant to the town planning laws.

ðVAT is applicable to the acquisition irrespective of any undertaking to build made in order to assure exemption from land tax (see below).

If the land is acquired from a non-taxable person (generally an individual), VAT will not be applicable.

New buildings / real estate assets

 The sale of real estate assets is subject to VAT for all disposals occurring within five years of their completion ( Article 257. I  1° of the FTC).

ðVAT is therefore applicable together with land tax at a rate of 0.715%. 

Where VAT is applicable, it will apply:

  • in principle, to the total price;
  • in exceptional circumstances, for land for real estate: to the gross margin where the assignor was not able to deduct VAT on the acquisition price.



As regards VAT, a building that is to undergo major restructuring is not equivalent to land for building unless its physical condition makes it unsuitable for any use at the time of acquisition (in which case it will be likened to land for building and thus subject to VAT).

haut parleur1

focus // major restructuring operations

Major restructuring operations on existing buildings can be likened to construction operations: 

ð for VAT: as regards the regime applicable to the sale of a property restructured in this way (the above-mentioned rule under ordinary law governs acquisitions of buildings to be restructured); 

ð for land tax: as regards both the exemption for acquisitions with an undertaking to build (in this case an undertaking to carry out restructuring) and the land tax regime at a rate of 0.715% on disposals occurring within five years of completion of the operation.

This regime, which may be particularly advantageous especially as regards land tax, will only apply if the following criteria under article 257 I -2-2° of the FTC are met: 

the operation may consist in the heightening of the building (only the value of such heightening works is then subject to VAT) or should lead to the refurbishment of at least 50% of (i.e. alternative criteria): 

  • the foundations; or 
  • the structure; or 
  • the façade; 
  • for more than 50% of the items considered. 

If these criteria are not met, the operation may be likened to a construction operation if restructuring works relate to all structural finishings below (at least 2/3 for each item), i.e. cumulative criteria: 

  • non load-bearing floors; 
  • external door frames; 
  • internal partitions; 
  • plumbing; 
  • electricity; 
  • heating (metropolitan areas) 

N.B.: The concept of load-bearing floor is quite complex in practice and failure to meet this criterion in the absence of a load-bearing floor in the building entails differing VAT and land tax consequences. 

N.B.: As it may be difficult to demonstrate retrospectively that these criteria have been met, once the renovation operation is completed it may be worth asking the tax administration for a formal statement (or a ruling confirming the new character of the restructured building), which it will generally agree to do within a time frame of between 3 and 6 months). 

Such statement is usually obtained on the basis of the request for a building permit and is dependent on the conditions of the building permit being met. 

Classification of the operation as a major restructuring is important as: 

ð the operation will benefit from exemption from land tax on acquisition; and 

ð land tax will be applicable to sales at a reduced rate of 0.715% (if within five years of completion). 

If the operation cannot be classified as major restructuring, it will be deemed a “dealer” operation with works, resulting in the application of land tax at the reduced rate on acquisition and the application of land tax upon resale at the rate under ordinary law (5.09 / 5.81 / 6.41%).


Delivery to oneself ("Livraison à soi-même", LASM)  


A specific declaration (form no. 940) must be filed with the tax authorities within one month of completion of the building.

 This is a purely tax-related operation regarding VAT and relates only to those assets produced by a company (i.e. a taxable person) with a view to holding them for a certain time. 

 On other hand, assets:

  • acquired by the company from third parties; or
  • produced by the company to be sold in the short term (stock)
  • are not affected.

The aim of such self-deliveries is to put the company that is itself producing an asset in the same position, as regards VAT, as if it had acquired it from a third party.

In practice, that means:

  • subjecting to VAT the full cost price of the built asset (VAT collected / ≈ sale of such asset with no margin); and
  • subjecting such VAT, reverse-charged for an “internal” operation, to the deductibility rules applicable on account of the future use of the asset (deductible VAT / ≈ acquisition).

This operation justifies the deduction of all input VAT borne by the company for the realisation of the asset (self-delivery is akin to a sale subject to VAT, with construction costs thus assigned to an operation that is generating turnover for VAT purposes: see article 271 of the FTC).

However, the VAT due in respect of self-delivery is generally more than the VAT paid in respect of the works, as the taxable base for the self-delivery incorporates elements of the cost price that are not subject to VAT (example: town planning taxes, financial costs, etc.).

The company will thus bear a VAT cost in respect of the operation (deductible under the rules of ordinary law, see below) similar to that which it would have incurred if it had acquired the asset from a third party (with the difference being that a third party would have charged a margin in addition to the elements of the cost price of the built asset). Any “windfall” effect in tax terms related to the non-application of VAT on certain cost price items is thus avoided (as is the distortion of competition this would have entailed). 

As set out above:

  • VAT generated by self-deliveries (“self-collected” VAT) is payable to the Treasury;
  • such VAT is deductible according to the future use of the asset with regard to VAT.


  • If the asset is intended for an activity that will generate a turnover subject to VAT, VAT on the self-delivery will be deductible (the self-delivery will be financially neutral);
  • otherwise it will be a cost increasing the cost price of the asset in question.

ðThe operative event for self-delivery is the completion of the building.

ðThe self-delivery itself must be realised before 31 December of the second year following completion. This period may be extended upon request where reasons are provided (e.g. where certain elements of the cost price are not yet finalised).

ðIn the event of the disposal of the property within two years of completion, self-delivery is unnecessary (indeed, in such cases, the full price of the asset would be subject to VAT on disposal).

ðThe self-delivery should be mentioned separately on a CA3 declaration with reference to the previously filed declaration no. 940.

VAT under the reverse-charged operation is itemised as:

  • collected VAT, with the base of the self-delivery, including all elements of the cost price of the property, listed under “other taxable operations” (analogous to the situation where the company sold the property to a third party); and
  • deductible VAT, if the asset is assigned to an activity generating a turnover subject to VAT (analogous to the situation where the company acquired the property from a third party).

Since 2015 (law aimed at simplifying matters for enterprises, loi de simplification de la vie des entreprises), deliveries to oneself are no longer necessary in the following cases:

  • real estate assets not re-sold within two years of completion;
  • real estate assets constructed by the enterprise for its own use if it can deduct all of the VAT relating to the self-delivery (i.e. the real estate asset is entirely dedicated to an activity subject to VAT.).




Vat (VAT on self-delivery = 100) is deductible according to the future use of the real estate asset:

Thus for activities not subject to VAT → an extra cost on the cost price of the building.

N.B.: in all cases, VAT on building construction works is deductible (as it is assigned to a downstream operation subject to VAT, namely the self-delivery).



A penalty of 5% is charged in the event of no self-delivery:

  • the penalty is reduced in proportion of costs not subject to VAT included in the base for self-delivery / total base for self-delivery;
  • the penalty is not due in the case of spontaneous settlement.

This document and the information it contains are intended to provide as complete and accurate information as possible. It is however theoretical in nature and must undergo all necessary checking prior to its application. FiscalImmo and its authors cannot in any circumstances be held liable on the basis of this document.