QUESTION?
Within the construction sector, one of the aspects that generates the most doubts is the tax rate of the VAT that must be applied to the renovation works of flats depending on the type of work carried out and the characteristics of the housing, which is why I am sending you this clarification prepared by the College's tax advisor.
The VAT rate applicable to each transaction is detailed below.
The following operations are taxed at the reduced rate (10%):
Construction or renovation of homes:
Execution of construction work or rehabilitation of buildings intended mainly for housing, including premises, garages and annexes, as a result of contracts directly formalized between the developer and the contractor. (The reduced rate does not apply to subcontracts). Buildings in which at least 50% of the built surface is intended for this use are considered primarily intended for housing.
Extension of housing:
It is considered construction, and 10% is applied, to the extension of a home whenever the living area increases. Interior renovation works of a home are not considered construction.
Sale with installation of wardrobes for homes:
Sales with installation of kitchen and bathroom cabinets and wall cabinets for homes, as a result of contracts directly formalized between the developer of the construction or renovation and the contractor.
Construction of community garages:
Work executions directly formalized with communities of owners for the construction of garages in buildings intended primarily for housing, provided that they are carried out on common land and the number of spaces to be awarded to each owner does not exceed two.
Repair or renovation works when the recipient is a natural person and uses the home for private use. Requirements:
Rehabilitation, similar and related works that are also taxed at 10%:
What is considered rehabilitation work?
What are the works analogous to those of rehabilitation?
What are the related works to those of rehabilitation?
Works related to rehabilitation will be considered those mentioned below when their total cost is lower than that derived from consolidation works or treatment of structural elements, facades or roofs and, if applicable, from works similar to these, as long as they are inextricably linked and do not consist of the mere finish or decoration of the building or the simple maintenance or painting of the facade:
Energy rehabilitation works will be considered those aimed at improving the energy performance of buildings by reducing their energy demand, increasing the performance of thermal systems and installations or incorporating equipment that uses renewable energy sources.
The following operations are taxed at the ordinary rate of 21%:
Repair or renovation works:
In general, they are taxed at 21%, but with the exceptions we have seen previously regarding certain repairs or renovations in homes.
Cupboards, doors and windows:
The delivery without installation of doors, windows, cupboards, kitchen furniture, etc., for carrying out works in buildings.
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