Yes, we know that the time has come to renovate your home. You want to rent it out, you are tired of the same space. We all have our reasons, and depending on what they are, you can benefit from the reduced VAT of 10%. This tax reduction, contemplated by the Treasury, is intended for improvements in the habitability and safety of the home. Of course, not for simple aesthetic changes.
Can your work benefit from the 10%?
Yes, as long as it involves work to improve the living conditions of your home: masonry, carpentry, plumbing, painting, or the installation of electrical, water or air conditioning systems.
It is also very important to look to the future, because if the reform is to incorporate renewable energy systems or improvements in energy efficiency, you will also be able to benefit from the aid.
These are some of the works that can benefit from this tax rate:
• Enclosures
• Electrical installation
• Air conditioning installation
• Fire protection system installations
• Improving energy efficiency
What do I have to meet to benefit from the requirements?
Everything has certain requirements, and to be able to benefit from reduced VAT, you must comply with:
1. You have to live there : Where you live is where you must carry out the renovation. Whether we are talking about your home or the community of owners. In this case, we exclude properties intended for rent. Therefore, the Treasury will ask you to prove that you live in the property that is going to be renovated.
2. Age, important : Your property must be at least two years old. This also applies to annexes such as garages and storage rooms.
3. There is a limit to everything : If the cost of the materials used exceeds 40%, you will not be able to benefit from the bonus. In other words, if the materials represent more than 40% of the total, you will have to say goodbye to the tax benefit.
“Rehabilitation works and other reforms” can be considered valid
If the renovation falls within the category of "rehabilitation" according to the regulations, you can also apply the reduced VAT of 10%. It is considered rehabilitation work when:
• At least 50% of the total cost of the project corresponds to structural works such as the consolidation of pillars, floors, facades or roofs.
• The total cost of the works exceeds 25% of the market value of the building (or the purchase price if it was purchased in the two years prior to the renovation).
In addition, similar or related works, such as masonry, plumbing or carpentry, may benefit from reduced VAT if they are necessary and inextricably linked to structural rehabilitation works.
Your work is very well documented.
Documenting your efforts is the most advisable thing in the world, but in this case, even more so. Request detailed and itemized invoices that show the main reason for the work. From the concept itself, to the description of the services provided and materials used. This will make things easier for you.
If you meet these requirements, you will be able to benefit from the reduced VAT rate of 10%, which will mean a significant saving on the final cost of your home renovation. The more you can earn on your operations, the better.