Prefabricated houses fixed to the ground will be taxed at 10% VAT

The nature of modular and prefabricated constructions has raised doubts regarding the applicable VAT rate upon acquisition. The Directorate General of Taxes (DGT) has clarified the technical distinction necessary to determine whether these structures should be taxed at the reduced rate or the general rate.

What the DGT has resolved

The administration establishes that prefabricated houses and modular constructions are considered buildings provided they meet two simultaneous requirements: they must be permanently attached to the ground and their purpose must be to serve as a dwelling. In this case, the operation is subject to the reduced tax rate of 10% in accordance with Law 37/1992 on VAT.

However, the ruling warns that if the structure has the capacity to be moved to another location without causing damage to the material or impairment to the object, it is not considered a building. Under these circumstances, the operation cannot benefit from the reduced rate, and the general rate of 21% must be applied.

What this means for you

If you are an individual interested in acquiring this type of housing, the fiscal cost of your investment will depend directly on the technical installation of the structure. The key lies not only in its intended use but in the immovability of the construction relative to the land.

• If the house is permanently anchored: The 10% rate applies, which represents a significant saving on the final price.
• If the house is easily movable: The 21% rate will apply, increasing the tax burden of the purchase.

What you should do

Before finalizing the purchase of a prefabricated or modular home, it is necessary to verify the technical specifications of the installation. It is essential to confirm whether the method of fixing it to the ground guarantees the permanence of the structure or if, conversely, it allows for its displacement without damage. It is recommended to analyze the sales contract and the assembly characteristics to avoid surprises in the tax settlement.