What rate applies to works on dwellings?

Construction or renovation work

The following transactions are taxed at the reduced rate (10%):

• Execution of construction or renovation work for buildings intended primarily for housing, including premises, garages and buildings, as a result of contracts directly formalised between the developer and the contractor. (The reduced rate is not applied to subcontractors). Buildings are mainly considered to be buildings in which at least 50% of the built area is used for this use.

• Sales with installation of kitchen and bathroom cabinets and built-in wardrobes for homes, as a result of contracts directly formalized between the construction or renovation promoter and the contractor.

• Works executed directly with Owners'Associations for the construction of garages in buildings mainly for housing, provided that they are carried out on common land and the number of places to be awarded to each owner does not exceed two.

Delivery without the installation of doors, windows, cabinets, kitchen furniture, etc., for building works will be taxed at the general rate of 21%, given that it is not considered as construction work.

Construction is considered, and 10% is applied to the extension of a property provided that the living area increases. The interior renovation works of a property are not considered as construction.

 Renovation work

Two requirements must be met to determine whether the works carried out are renovation work and are taxed at a reduced rate of 10%:

1. That more than 50% of the total cost of the renovation project corresponds to construction or treatment of structural elements, façades or roofs or with similar or related works to renovation work.

   For these purposes, it will be necessary to avail of sufficient items of proof to certify the true nature of the projected work, such as, inter alia, professional statements specifically issued or project visa and, if applicable, the project certification by a professional association.

2. If the first requirement is met, the total amount of the total works must exceed 25% of the building's acquisition price ( if it was carried out in the two years prior to the start of the renovation work), or the market value of the building before its renovation, discounting in both cases the value of the land.

Similar works to renovation work

1. Structural adequacy that provides the building with constructive security conditions, ensuring its stability and mechanical resistance.

2. Reinforcement or adaptation of foundations, as well as those that affect or consist in the treatment of pillars or forgings.

3. Those for extending the built area, above and below ground level.

4. Those for rebuilding facades and interior courtyards.

5. Installation of lifting elements, including those intended to save architectural barriers for use by disabled persons.

Related works to renovation work

Work related to rehabilitation will be considered to be the work listed below when the total cost is below the cost of work carried out on consolidation or treatment of structural elements, façades or roofing and similar work to this, if any, provided they are connected indivisibly thereto and not merely consisting of finishing or embellishment of the building or simple maintenance or painting of the façade:

1. Masonry, plumbing and carpentry.

2. Those designed to improve and adapt enclosures, electrical installations, water and air-conditioning and fire protection.

3. Energy renovation work.

Energy renovation work will be deemed to be work carried out to improve the energy performance of buildings by reducing energy needs, increasing the performance of heating systems and installations, or installing equipment that uses renewable energy sources.