What type of VAT does the reform of a house carry?

It is not the same to increase the final bill of the cost of a reform by 10% than by 21% because in the pocket, it shows. Until a few years ago, the VAT corresponding to the rehabilitation of a private home or a building as a whole generated certain doubts, because it was not too clear when the reduced tax could be applied and when not. At present, this does not occur, because the Tax agency expressly details the necessary requirements for our reform to be taxed at 10% and not at 21%

Conditions for works carried out at home to be taxed at 10%

When planning a reform, just as you should inform yourself about the possible grants and subsidies offered by the majority of autonomous communities, depending on the type of work in question (installation of elevator, ramps that facilitate mobility, change of bathtub for shower …), it is also important to know the VAT applicable to that renovation of the house that you have planned.

The renovation and / or repair works that can be carried out in private homes will have Reduced VAT provided that three conditions are met:

  1. That the recipient is a Physical person (not legal, such as a company) that is going to use that home for its own private use.
  2. That the house or building where the renovation is to be carried out has been built at least two years before starting the renovation, that is, that is at least two years old.
  3. That the person who carries out the work does not contribute materials for the execution and, if he does, the total cost of these does not exceed 40% of the tax base of the cost of the operation.

Although it seems complicated, in reality, most of the works that a person can do in their old house (more than two years) you are going to pay reduced VAT because, at present, this tax rate is applicable to the most common jobs involved in any renovation: masonry, plumbing, electricity, installations and assemblies, placement of false ceiling, painting, changes to improve energy efficiency … The confusion comes because until 2010 the 10% VAT was limited only to masonry works.

Finally, it must be emphasized that it is important that the materials provided do not exceed 40% of the taxable base of the invoice. Imagine, for example, that you decide to renew the floor and the tiling of the kitchen and bathrooms. The budget for the reform amounts to 8,000 euros. If the cost of the materials: tiles, mortar, etc., is 3,000 euros, the reform would have reduced VAT, but if that cost exceeded 40% of 8,000 (3,200), 21% would have to be applied. We will have to throw numbers.