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V2404-22 18 November 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

Possibility of applying the reduced rate of 10% to rehabilitation works of a residence for persons with disabilities

A foundation managing a residence for persons with intellectual disabilities asks which VAT rate applies to works carried out on said property. The DGT responds that the reduced rate of 10% may be applied if the works consist of the construction or rehabilitation of buildings primarily intended for housing.

The question raised

The tax rate that will be applied for Value Added Tax purposes to the execution of works in the aforementioned residence.

The DGT's ruling

Construction works for the rehabilitation of a building shall be taxed at the reduced rate of 10% provided that the building is intended for permanent housing and more than 50% of its surface area is used for such purpose. Housing is considered to be the space intended for a room or dwelling where the person carries out their domestic life. If the works do not qualify as construction or rehabilitation, the 10% rate could apply as renovation or repair if the requirements of the VAT Law are met.

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