What rate applies to works on dwellings?

Construction or rehabilitation works

The following operations are taxed at a reduced rate (10%):

• Execution of works for construction or rehabilitation of buildings intended primarily 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 subcontractors). Buildings where at least 50% of the constructed surface area is used for such purposes are considered to be primarily intended for housing.

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

• Executions of works 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.

The delivery without installation of doors, windows, cupboards, kitchen furniture, etc., for the execution of works in buildings will in all cases be taxed at the general rate of 21%, since it is not considered execution of work.

The expansion of a home is considered construction, and the 10% rate is applied, provided that it increases the habitable surface area. Interior renovation works on a home are not considered construction.

 Rehabilitation works

To determine whether the works carried out are rehabilitation works and are taxed at the reduced rate of 10%, two requirements must be met:

1. That more than 50% of the total cost of the rehabilitation project corresponds to works of consolidation or treatment of structural elements, facades or roofs or with works similar or related to rehabilitation.

   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 works must exceed 25% of the purchase price of the building (if it was carried out in the two years prior to the start of the rehabilitation works), or the market value of the building before its rehabilitation, deducting in both cases the value of the land.

Works similar to those of rehabilitation

1. Those of structural adaptation that provide the building with conditions of constructive safety, so that its stability and mechanical resistance are guaranteed.

2. Those for reinforcing or adapting the foundation, as well as those that affect or consist of the treatment of pillars or floors.

3. Those for the expansion of the constructed surface, above and below ground level.

4. Those of reconstruction of facades and interior patios.

5. The installation of lifting elements, including those intended to overcome architectural barriers for use by disabled people.

Works related to rehabilitation

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. The works of masonry, plumbing and carpentry.

2. Those aimed at improving and adapting enclosures, electrical installations, water and air conditioning, and fire protection.

3. The works of energetic rehabilitation.

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.