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V1839-23 26 June 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

Reduced 10% VAT rate applies to construction works for housing

A self-builder enquired whether the installation of ceilings and their insulation in a single-family home should be taxed at 21% or 10%. The Directorate General for Taxes (DGT) ruled that the 10% rate applies if the requirements for housing construction works are met.

The question raised

Applicable tax rate for Value Added Tax purposes.

The DGT's ruling

The 10% rate applies to works, with or without materials, derived from direct contracts between the developer and the contractor for the construction or rehabilitation of buildings intended primarily for housing. A developer is considered to be the owner who constructs or contracts the construction for sale, rental, or personal use. If the original invoice applied the general rate, the taxable person must issue a corrective invoice.

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