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V5455-26 7 August 2026 · SG de Impuestos sobre el Consumo Criterion in force
IVA · autopromoción

10% reduced VAT rate applies to self-build housing construction without requiring a certificate of occupancy

A private individual enquired whether constructing a property through self-promotion for long-term rental purposes qualifies for the 10% reduced VAT rate. The Directorate-General for Taxes (DGT) ruled that this rate is applicable provided the building is objectively suitable for residential use, regardless of whether it holds a certificate of occupancy or a habitation licence.

The question raised

It is questioned, for the purposes of Value Added Tax, whether the construction of a dwelling shall be taxed at the reduced rate of 10 percent, pursuant to Article 91.One.3.1. of Law 37/1992, of December 28, on Value Added Tax.

The DGT's ruling

The reduced rate of 10% applies to construction or renovation works of buildings primarily intended for residential use. Suitability for residential use is an objective circumstance derived from the design, construction, and possible legal purpose, and is not conditioned on the existence of a certificate of habitability or an occupancy permit. The interested party must provide the means of proof justifying such suitability to be assessed by the Administration.

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