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V0740-18 19 March 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · ejecución de obras

Reduced 10% VAT rate applies to renovation or refurbishment works subject to specific requirements

A construction company has enquired whether roof and structural renovation works on a building qualify for the reduced VAT rate. The DGT clarifies that eligibility depends on whether the works are classified as refurbishment or as renovation and repair, provided that cost and material thresholds are met.

The question raised

Whether the reduced tax rate is applicable to the indicated works.

The DGT's ruling

To apply the 10% rate as rehabilitation, the project must qualitatively consist of consolidation or treatment of structural elements, facades, or roofs, and quantitatively exceed 25% of the value of the building excluding the land. As renovation and repair works, the recipient must be an individual or a community of owners, the dwelling must be at least two years old, and the cost of materials may not exceed 40% of the tax base.

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