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V5174-26 15 July 2026 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

10% VAT on construction or renovation not necessarily requiring habitability certificate

A renovation company asks which VAT rate applies to rebuilding a shared wall between two homes. The DGT clarifies that for the reduced 10% VAT rate on construction or renovation, the suitability of a building for residential use is determined by objective characteristics, not necessarily by a habitability certificate.

The question raised

Applicable tax rate for Value Added Tax purposes.

The DGT's ruling

The application of the reduced rate of 10% in the construction or rehabilitation of buildings intended for residential use is not conditional upon the existence of a certificate of habitability or an occupancy permit. Suitability for residential use is derived from the objective characteristics of the design and construction, together with its possible legal purpose. For works to be considered rehabilitation, they must meet qualitative requirements (more than 50% of the cost in structural elements, facades, or roofs) and quantitative requirements (cost exceeding 25% of the value of the property excluding the land).

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