Reduced VAT at 5,5 %: conditions and areas
Published on June 18, 2026 · Reduced VAT & BRS
The reduced VAT rate at 5,5 % is a little-known but powerful home ownership scheme: it allows you to buy a new main residence at a noticeably lower price in urban renewal neighbourhoods. Here are the conditions and how it works.
In brief
VAT falls from 20 % to 5,5 % on the purchase of a new main residence located in an ANRU zone or a priority urban district (QPV), or within a 300 m perimeter around them, subject to income conditions and a minimum holding period of 10 years.
Who is it for?
The scheme is aimed at first-time buyers and buyers on modest incomes who wish to purchase their main residence in a new build, in a neighbourhood covered by urban regeneration. It is a helping hand towards home ownership in areas undergoing transformation.
The conditions to meet
- A new home that becomes your main residence.
- A location within an ANRU or QPV zone (or within a perimeter of 300 m around it).
- Income ceilings respected.
- A minimum holding period of 10 years as your main residence.
- Construction compliant with RE2020.
The rate: 5,5 % instead of 20 %
| Situation | VAT rate |
|---|---|
| Main-residence purchase in ANRU/QPV zone | 5,5 % (subject to conditions) |
| Standard new-build purchase | 20 % |
The reduced rate applies to the price of the home, replacing the standard rate, hence a noticeable reduction in the acquisition cost.
The 10-year holding commitment
This is the key counterpart: you must keep the property as your main residence for at least 10 years. If you resell before this period ends, a VAT top-up becomes payable, corresponding to the difference between 20 % and 5,5 %, i.e. 14,5 %, reducing after the 5th year. This commitment should be factored into your life plans.
Combining the PTZ: the right combination
VAT at 5,5 % and the zero-interest loan are two distinct advantages that can be combined for an eligible purchase of a new main residence: a reduced acquisition price on one hand, interest-free financing on the other. It is a particularly interesting route to home ownership, to be confirmed case by case, as each scheme retains its own conditions.
Not to be confused: 5,5 % home ownership and PLS
The 5,5 % VAT rate for home ownership concerns your main residence. It should not be confused with the PLS (Prêt Locatif Social), which finances social or intermediate rental investment, under its own rules (rents and tenants' incomes capped). These are two different logics: an adviser will guide you according to your project.
Conclusion
The reduced VAT rate of 5,5 % makes new homes considerably more accessible in the areas concerned, especially combined with the PTZ. In return, the 10-year holding commitment shapes your project. Check the precise zoning (the boundary sometimes depends on a few metres) and the ceilings with an adviser before committing.
