Green investments less interesting

Until recently a number of tax reductions for energy saving investments in private houses existed. While looking for extra income, the government has cut seriously in these tax reductions. An overview of what is still possible or not.

Abolished

The reduction for passive houses and low and zero energy houses does not apply any longer as from 1 January 2012. For houses for which a certificate was issued at the latest on 31 December 2011, the reduction remains applicable for the next 10 years. For applications filed in 2011, but for which the certificate was issued in January or February 2012, the certificate is deemed to have been issued in 2011.

Green loan: reduction of tax advantage

The tax advantage for existing green loans, which were concluded earlier, is also reduced. As from 2012 only 30% of the interest paid gives right to a tax deduction, instead of 40%. New loans, concluded as from 1 January 2012, cannot longer benefit from the tax advantage.

Tax reduction for roof isolation remains

Only the tax reduction for roof isolations remains in place. The tax reduction is however reduced from 40% of the cost price to 30% of the cost price. Carry-forward of the tax reduction is also no longer possible.

What with planned investments?

Abolishment of these tax reductions can have a huge negative impact for those who planned investments in 2012. The decision to make an (important) investment was possibly influenced by the related tax advantages. In order to meet these difficulties, transitional measures are foreseen.

Two conditions should be fulfilled:

The contract should have been signed before 28 November 2011. An offer which was signed “for agreement” also qualifies as a contract;

The investment should be paid in 2012. When you only pay in 2013, the transitional measures do not apply, even when the contract was signed before 28 November 2011.

If you fulfil these conditions, the old regime still applies: tax reductions amounting to 40% of the cost price which can be carried forward to the next three fiscal years. The regime applies for solar panels, double glass, heat pumps, new boilers, energy audits and roof isolation.

The transitional measures thus also apply to roof isolation. This leads to the following result, where the difference of one day in signing the contract can make a huge difference what the tax advantage is concerned:

Contract for roof isolation with contractor signed on 27 November 2011, which will be paid in 2012: you have right to a tax reduction of 40% which can be carried forward during the next three fiscal years;

Contract for roof isolation with contractor signed on 28 November 2011, which will be paid in 2012: you have right to a tax reduction of 30% which cannot be carried forward.

It is important to know that these transitional measures are laid down in the law itself. These are no favours which can be granted or refused by the tax authorities.