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V3030-20 8 October 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · autopromoción

Reduced VAT rates apply to self-built homes and solar plots

A professional enquires about VAT treatment for building his own home and purchasing a plot. Hacienda confirms that construction work qualifies for the reduced 10% rate, but the sale of a plot by a real estate company is subject to the standard 21% rate.

The question raised

Taxation of the operation in Value Added Tax.

The DGT's ruling

The execution of works for the construction of a dwelling by a developer (including individuals in self-promotion) allows for the application of the reduced rate of 10%. The delivery of a plot of land classified as developable land by a real estate agency is subject to the general rate of 21%, as it is not an exempt delivery. The VAT deduction for the partial use of the dwelling as an office will depend on the accreditation of its professional use.

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