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IVA on building work in Spain: 10% or 21%, and what changes if you live in Britain

The Spanish law that sets the reduced rate for renovation work asks three things of the person paying: that you are an individual, that you are not acting as a business, and that you use the home privately. It does not ask where you live or where you pay tax. That is the whole answer to the question, and it comes from the article itself rather than from an interpretation of it. What does break the reduced rate is using the home as a business, and letting it out is the case to look at closely. What is written for Spanish taxpayers is something else entirely: the income tax deduction for energy works and the national grant programme both attach to a habitual home, and a non resident files a different tax altogether.

The two rates, and what decides which one you get

  • 21% is the standard rate.
  • 10% applies to renovation and repair work on a dwelling, if three conditions are met.

The three conditions are about you, about the age of the home, and about how much material the builder supplies. The first one is the one this page exists for, so it gets its own section below. The other two are simple to check.

Que la construcción o rehabilitación de la vivienda a que se refieren las obras haya concluido al menos dos años antes del inicio de estas últimas.
Artículo 91.Uno.2.10.º b), 2026-03-02
Que la persona que realice las obras no aporte materiales para su ejecución o, en el caso de que los aporte, su coste no exceda del 40 por ciento de la base imponible de la operación.
Artículo 91.Uno.2.10.º c), 2026-03-02

The tax authority publishes its own worked example of that material limit, and it is worth reading because it turns on the invoice rather than on the job: the same 10,000 euro job falls either side of the line depending on how much of it is material.

La colocación del suelo de una vivienda por 10.000 €, correspondiendo 3.000 € a materiales aportados por quien realiza la obra, tributa toda ella al tipo reducido.
Obras de renovación o reparación, apartado "Por ejemplo", 2026-03-26
Una obra por un importe total de 10.000 €, si los materiales aportados ascienden a 5.000 €., tributa, sin embargo, al tipo general.
Obras de renovación o reparación, apartado "Por ejemplo", 2026-03-26

If you do not live in Spain

Three things, and they are all about what you are and what you use the home for. The article asks for a natural person, who is not acting as a business or professional, and who uses the dwelling for private purposes. It sets no condition about where that person lives or pays tax. The same paragraph adds that a residents association ordering the work is covered too.

Que el destinatario sea persona física, no actúe como empresario o profesional y utilice la vivienda a que se refieren las obras para su uso particular. No obstante lo dispuesto en el párrafo anterior, también se comprenderán en este número las citadas ejecuciones de obra cuando su destinatario sea una comunidad de propietarios.
Artículo 91.Uno.2.10.º a), 2026-03-02

Read the conditions again: an individual, not acting as a business, using the home privately. Where you live is not among them, and neither is where you pay tax. That is the answer, and it comes from the article rather than from anyone's reading of it.

What is written for Spanish taxpayers only

The reduced rate is one thing; the reliefs are another. Several of them attach to a habitual home or to a tax a non resident does not file, and that condition is in the text itself rather than in a rule about foreigners.

The income tax deduction for works that improve a home energy performance.

The provision attaches the deduction to your habitual dwelling, or to another dwelling you own that you had let out as housing at the time or that was waiting to be let. A second home that is neither of those two is not named in the sentence.

[...] por las obras realizadas durante dicho período para la reducción de la demanda de calefacción y refrigeración de su vivienda habitual o de cualquier otra de su titularidad que tuviera arrendada para su uso como vivienda en ese momento o en expectativa de alquiler, siempre que en este último caso, la vivienda se alquile antes de 31 de diciembre de 2027.
Disposición adicional quincuagésima, apartado 1, 2026-04-29
The same deduction, seen from the other end: where the money comes off.

The provision subtracts it from the state part of the personal income tax bill. That is the tax Spanish residents file. A non resident owner files a different tax, and the pages that describe that tax are listed separately here.

El importe de estas deducciones se restará de la cuota íntegra estatal después de las deducciones previstas en los apartados 1, 2, 3, 4, y 5 del artículo 68 de esta ley.
Disposición adicional quincuagésima, apartado 6, 2026-04-29
The national grant programme for energy improvement of a single dwelling.

The decree requires the dwelling to be the habitual and permanent home of its owner, usufructuary or tenant at the moment the grant is applied for, and says this may be evidenced with a municipal registration certificate.

Las viviendas para las que se solicite financiación de este programa han de constituir el domicilio habitual y permanente de sus propietarios, usufructuarios o arrendatarios en el momento de solicitar la ayuda. Dicha circunstancia se podrá acreditar mediante certificación o volante de empadronamiento.
Artículo 42, 2026-04-23
Deducting what you spend on the property from what you are taxed on.

The non resident income tax law taxes the gross amount as a general rule, and then opens a special regime for taxpayers resident in another member state of the European Union, extended to the European Economic Area where there is effective exchange of tax information. Those two are the named categories in the article.

Con carácter general, la base imponible correspondiente a los rendimientos que los contribuyentes por este impuesto obtengan sin mediación de establecimiento permanente estará constituida por su importe íntegro [...] 6. Cuando se trate de contribuyentes residentes en otro Estado miembro de la Unión Europea, se aplicarán las siguientes reglas especiales.
Artículo 24.1 y 24.6, 2026-06-23
The same two items, but stated by the tax office about the United Kingdom by name.

The tax office publishes a page listing what changed for residents of the United Kingdom for income arising from 01 January 2021. Two of its bullets are the expense deduction and the rate. This is the tax office describing its own position, and it is the only source in this file that names the country.

No se podrán deducir los gastos previstos en el artículo 24.6 TRLIRNR [...] dejará de ser aplicable el tipo de gravamen general del 19%, propio de los residentes en otro Estado miembro de la UE, o del EEE con los que exista normativa sobre asistencia mutua en materia de intercambio de información, y pasará a ser aplicable el 24%. Entre estas rentas pueden citarse: rendimientos de inmuebles, rendimientos del trabajo, renta imputadas de bienes inmuebles.
Base imponible (artículo 24.6 TRLIRNR) y Tipo de gravamen (artículo 25 TRLIRNR), 2025-06-18

Where the sources say nothing

Naming the silences is part of the answer. On these points the published sources do not decide the case either way, so this page does not either.

  • That the tax office page about VAT on works in dwellings would say something about owners who live abroad, since that is a large group of Spanish home owners. It says nothing. The page lists the two rates, the three conditions and two worked examples, and the words resident, non resident, foreign and abroad do not appear on it. The companion page with frequently asked questions runs through thirteen concrete cases, from boiler swaps to swimming pools to insurers, and not one of them is about an owner who lives outside Spain. Ask: The tax office answers individual cases through its own channels. Its non resident section is the entry point, and a gestor or tax adviser is the other route.
  • That the tax office section aimed at non residents would carry the renovation question somewhere, since a second home is the reason most of them are there. The section carries eleven subjects. Two of them are about VAT, and neither is this one: VAT for businesses and professionals not established in Spain, and VAT exemptions and refunds for travellers and embassies. There is no subject about VAT on works in your own dwelling. Ask: The same section carries an interactive tool, the Informador for non resident income tax, and the general enquiry channels of the tax office.
  • That someone would have asked the tax authority whether a non resident can use the energy efficiency renovation deduction, since it is the headline renovation incentive in Spanish income tax. I searched the official binding consultation database on the wording of that deduction combined with non residence, in several phrasings, and got no results at all. So there is no published binding answer to point at, in either direction. Ask: That makes it a question for the tax office directly, or for a gestor, and not something to read off a website.
  • That the binding consultation about British owners of Spanish property would still describe the position today. The one I found, V1083-17, is dated 09 May 2017 and its reasoning opens with the words that the consultants, being resident in the United Kingdom, are resident in a member state of the European Union. On that footing it applies the expense deduction rule and the lower of the two rates. I searched for a later consultation covering the same ground after that changed and found none. Ask: The tax office does publish a page of its own about what changed for residents of the United Kingdom. That page is the source to read, and an adviser is the place to take your own case.
  • A sunset date on the reduced renovation rate, the way temporary VAT cuts usually carry one. The consolidated text of the article carries no end date for this paragraph. That is an absence, not a promise: it means nothing is written down today, not that the rule cannot change later. Ask: The consolidated text in the official gazette is updated whenever the article changes, so that is the place to check before you sign anything.

Where to take your own case

This page sets out what the published sources say, with the article and the date next to each line, so you can check them yourself. It is not tax advice and it does not tell you what applies to your own situation. For that, ask the Agencia Tributaria or a gestor.

Every figure on this page carries its article, its Spanish sentence and the date the source itself bears, checked on 2026-08-17. 18 figures in total, each one linked back to the law or the tax authority page it came from.

Working out what the job costs before the tax: renovating a house in Spain.

Frequently asked questions

Does a holiday home that stands empty most of the year count as being used for private purposes in the sense of the VAT article?

The article says private use and the binding answer says the reduced rate holds even where the person does not habitually live there. Neither text says how little use is still use, and neither was written about a holiday home standing empty. That gap is real and I am not going to paper over it. Ask agenciaTributaria,gestor.

What happens where the home is used privately for part of the year and let out for the rest?

The tax office summary says letting or business use rules out the reduced rate even where it is only partial, but it does not say how that works across a year, per invoice, or per part of the building. The frequently asked questions page answers a fully let dwelling, not a mixed one. Ask agenciaTributaria,gestor.

How does a foreign owner evidence that the dwelling was finished long enough before the works start?

The condition is in the article, the evidence is not. The binding answers say repeatedly that questions of fact are for the taxpayer to evidence and for the tax agency to assess, and they name no document. Ask agenciaTributaria,gestor.

If a builder invoices the general rate where you believe the reduced rate applies, what then?

Nothing I opened describes that route. The tax office pages describe the rule and the invoice wording. They do not describe a correction procedure for the customer. Ask agenciaTributaria,gestor.

What is the position today for a British owner on expenses and rate under the non resident tax?

There are two official sources and they do not sit on the same date. The binding consultation that names British owners is from 2017 and reasons from European Union membership. The tax office page listing the changes for residents of the United Kingdom carries a later date. Deciding what that means for a given person is a judgement, and this file does not make judgements. Ask eigenaar,agenciaTributaria,gestor.

Do the regional grant programmes attach the same habitual home condition as the national decree?

Not researched in this round. The national decree is in this file because I read it. The regions run their own calls and I have not opened them, so this file says nothing about them. Ask eigenaar.