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V2580-23 26 September 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

10% reduced VAT rate applicable to home renovation works subject to specific usage and material cost requirements

A private individual inquired whether the renovation of a wooden door frame in their primary residence should be taxed at 21% or 10% VAT. The Directorate General for Taxes (DGT) clarified that the 10% reduced rate may be applied provided specific requirements regarding the recipient, the age of the property, and the cost of materials supplied by the professional are met.

The question raised

Applicable tax rate for Value Added Tax purposes.

The DGT's ruling

Renovation and repair works on dwellings may be taxed at 10% if the recipient is a natural person using it for private use, the construction was completed at least two years ago, and the cost of materials provided by the professional does not exceed 40% of the taxable base. If the cost of materials exceeds said limit, the general rate of 21% shall apply to the entire operation. Materials include all tangible assets incorporated into the building, including subcontracted works.

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