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V3126-20 ·20 October 2020 ·consulta-vinculante Medium impact
Tax

10% reduced VAT rate applies to renovation works if material costs do not exceed 40% of the taxable base

A query was raised regarding the VAT rate applicable to renovation works in a primary residence (e.g., showers, plumbing, painting). The DGT ruled that a 10% rate applies provided legal requirements are met, specifically concerning the limit on material costs.

In 5 key points

How it affects those involved

This clarification provides certainty for homeowners and contractors regarding the eligibility for the reduced VAT rate in residential renovation projects, contingent on the ratio of material costs to labour.

Lifecycle

2020-10-20PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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