VAT on renovation work in Spain is normally 21%. A reduced rate of 10% can apply when the legal conditions are met. It is important to distinguish ordinary renovation or repair from construction and qualifying rehabilitation: these are separate tax categories.
When can renovation and repair qualify for 10% VAT?
According to Agencia Tributaria, the building must be used mainly for housing. The recipient must be an individual using the dwelling privately; the reduced renovation rate does not apply if it is used for letting or a business or professional activity, even partly.
Construction or rehabilitation must have been completed at least two years before the renovation or repair starts. This is not simply a period counted from the date you bought the property or first moved into it.
The contractor must supply no materials, or the cost of the materials supplied must not exceed 40% of the taxable amount of the operation. This threshold concerns the taxable amount before VAT, rather than the final invoice including tax. If supplied materials exceed the threshold, the whole renovation or repair operation is taxed at the standard rate; it is not split artificially into labour at 10% and materials at 21%.
New construction and extensions are a separate case
It is incorrect to say that every new build or extension is always taxed at 21%. Certain construction or rehabilitation contracts for buildings mainly intended as dwellings qualify for 10% when made directly between the developer and the contractor. Agencia Tributaria also identifies an extension that increases a dwelling’s habitable surface as construction for these purposes. Subcontracting and ordinary interior renovation must be assessed separately.
Qualifying rehabilitation has specific legal tests. It is not enough to describe an ordinary bathroom or kitchen update as rehabilitation. The nature of the work, contract and building use must be established before deciding the rate.
Materials bought separately
The supply of items such as doors, windows, fitted wardrobes or kitchen furniture without installation is subject to 21%. For a combined supply-and-installation contract, the relevant rules depend on the type of operation. Buying materials separately does not by itself prove that the contractor’s work qualifies for 10%.
What to confirm before accepting a quotation
Tell the contractor who will receive the invoice, how the dwelling is used and when construction or rehabilitation was completed. Ask for a written scope, a clear distinction between included and excluded items, and the VAT rate and total. If the circumstances are uncertain, have the application of the rate checked before work starts.
A terrace, pergola or other exterior project should not be promised a reduced rate solely because it is next to a home. Its classification and all applicable conditions must be reviewed. Nationality alone does not determine the VAT rate.
Official sources and local enquiries
Read the official guidance on renovation and repair and construction and rehabilitation. This article was reviewed on 3 October 2026.
OBRAPOL focuses on bathrooms, kitchens and made-to-measure furniture in Huércal-Overa, Vera, Vera Playa, Garrucha, Mojácar, Albox, Arboleas and nearby areas. Request a quotation with your location and project details, or contact OBRAPOL. The scope, availability and tax treatment are confirmed for each project.
