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V0816-20 13 April 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

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

An entity has requested clarification on the VAT rate applicable to renovations in a private residential property built more than two years ago. The DGT clarifies that the 10% rate may be applied to renovation and repair works, provided that the cost of materials supplied does not exceed 40% of the taxable base.

The question raised

The Value Added Tax rate applicable to the described operation.

The DGT's ruling

Renovation and repair works in dwellings intended for private use may be taxed at 10% if the recipient is a natural person, the construction was completed more than two years ago, and the cost of the materials provided does not exceed 40% of the taxable base. If this limit is exceeded, the general rate of 21% shall apply to the entire operation. Household appliances are always taxed at 21%, even if they are installed alongside renovation works.

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