Is IVA on a renovation in Spain 10% or 21%?

IVA is Spain’s value-added tax. The name used in a renovation brochure does not determine its rate: the legal nature of the works, recipient, use of the dwelling and contract matter. A whole-home refurbishment is not automatically fiscal rehabilitation.

Ordinary renewal and repair

Ordinary dwelling renovation or repair can qualify for 10% IVA when the recipient is a private individual using the dwelling privately, construction or rehabilitation finished at least 2 years before the works, and contractor-supplied materials cost no more than 40% of the taxable base. Qualifying communities of owners are also covered by the law.^{[1, 2]} For a private individual’s contract, confirm that the dwelling is for private use, construction or rehabilitation finished at least two years before the work, and the supplied-materials cost meets the statutory limit. The law also includes qualifying communities of owners; their circumstances must be assessed.

A rented or business-use dwelling does not qualify through the ordinary private-use route. The general IVA rate for ordinary repair or renovation is 21%; the private-home reduced-rate route does not cover rented or business-use dwellings. Construction and works meeting the tax definition of rehabilitation have a separate reduced-rate test, so the contract must be assessed before assigning a rate.^{[1, 2, 3]} This is why a small rental refresh and a private-home repair can have different tax treatment even if their physical tasks appear similar.

Understand the materials test

The taxable base is the amount before IVA. Compare the cost of materials supplied by the contractor with that base. At 40% or below, this condition can be met; above 40%, the ordinary reduced-rate route is not available for that supply. Meeting this test alone is insufficient if another requirement fails.

The breakdown should be supportable, not just an arbitrary label saying labour. Products supplied as part of the work and equipment purchases need proper classification. Separately buying an item does not justify artificially splitting what is actually one transaction. Ask for the tax basis to be explained before signing, particularly when comparing quotations with different treatment. ^{[1, 2]}

Construction and fiscal rehabilitation

AEAT explains a separate reduced-rate route for qualifying construction or rehabilitation of mainly residential buildings. It has its own conditions, including the nature of the works and the contracting relationship. Do not apply the ordinary repair checklist as if it settled every rehabilitation contract. ^{[1, 2, 3]}

Where the scope may fall in that category, establish the necessary technical and tax assessment before issuing a final rate. Interior renewal alone does not demonstrate that the fiscal definition is satisfied.

Information to assemble

1. Identify the contracting recipient and the actual use, including any proposed change after the work.
2. Establish the completion date of construction or relevant rehabilitation using appropriate evidence; a cadastral date may be a starting point, not proof of every later intervention.
3. Define the work and classify the contract before choosing the tax route.
4. Prepare a justified breakdown of contractor-supplied materials and the taxable base.
5. Retain the recipient’s relevant written declarations and supporting documents.
6. Reassess changes to scope or supplies before the final invoice.

We show the assessed IVA separately in the quotation. For a complex classification, the relevant tax adviser’s review should be part of the decision before work is committed.

Separate IVA from municipal charges

ICIO and the tasa are municipal charges assessed under their own rules. València’s ICIO rate is 4% of the taxable execution material cost. The declared budget, applicable exclusions and any relief must be checked for the particular works.^{[4, 5]} The planning fee (tasa urbanística) starts at €140.90 for a base of up to €6,010.12 and rises on a sliding scale. It uses the same base as ICIO.^[6] The municipal fees guide explains the base, payment and records; the quote guide helps compare the complete scope.