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V2458-20 17 July 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo impositivo reducido

Reduced 10% VAT rate applies to construction or renovation works on convents primarily used for housing

A religious entity has requested clarification on the VAT rate applicable to renovation works in a convent where more than 50% of the floor area is used for residential purposes. The Directorate-General for Taxes (DGT) has ruled that the 10% reduced rate may be applied, provided the requirements for renovation works are met.

The question raised

Applicable tax rate for the aforementioned works in Value Added Tax.

The DGT's ruling

A rate of 10% is applied to construction or renovation works on buildings primarily intended for housing, including convents that serve as the residence of their inhabitants. For the works to be considered renovation, they must meet the requirements of Article 20.1.22.B of Law 37/1992, such as the cost exceeding 25% of the value of the building. If these conditions are not met, the general rate of 21% shall apply.

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