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V0640-22 24 March 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · rehabilitación de edificaciones

10% VAT rate applies to housing rehabilitation meeting quality and quantity criteria

A public consortium queries the VAT rate, liability and due date for housing rehabilitation works it coordinates. The DGT clarifies that a 10% reduced rate applies if the works are rehabilitation under law, otherwise the standard 21% rate applies.

The question raised

Type of Value Added Tax applicable to the rehabilitation works of dwellings received and provided by the taxpayer. Accrual and taxable person for Value Added Tax in the works to be carried out by the taxpayer for each owner. Deductibility of the VAT amounts incurred in the works.

The DGT's ruling

Rehabilitation works on buildings intended for residential use are taxed at 10% if they meet the qualitative and quantitative requirements of the VAT Act. The reverse charge mechanism applies when the recipient is a business or a professional. Subsidies directly linked to the price form part of the taxable base. The right to deduct input VAT will depend on whether the operations are taxable and not exempt, and the pro rata rule may apply.

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