The Supreme Court facilitates access to reduced VAT on newly built homes
04/03/2025
The Supreme Court facilitates access to reduced VAT on newly built homes
En los medios
Ruling STS 299/2025, of 28 January 2025, has made the requirements for applying the reduced VAT rate of 10% to the purchase of new-build homes more flexible. This is reported by El País in an article analysed by Juan Ignacio Echarren and Patricia Miralles, partners in Lener's Fiscal and Tax department.
Until now, it was necessary to have a licence of first occupation or a certificate of occupancy to accredit the suitability of a property and benefit from the reduced rate. However, the High Court opens the door to other means.
Juan Ignacio Echarren, managing partner of the Fiscal and Tax Department of Lener, explains:
‘The problem arises because the VAT Law does not have a specific criterion to determine when the building is understood to be finished and suitable for use as a dwelling. In practice, it was considered to be when it had the cédula de habitabilidad or the licence of first occupation. The Supreme Court says that this is all very well, but that it can be accredited by any other means of proof, as these are administrative documents that can be delayed. It saves time,’ concludes Juan Ignacio Echarren, partner at Lener.
The article also analyses the application of reduced VAT in home renovations.
Patricia Miralles, partner at Lener in the same department, analyses the impact on repairs covered by insurers: ‘The tax authorities and some courts understand that, in this case, as the recipient of the invoice for the service is not the natural person, but an insurer, the services are taxed at the general VAT rate of 21%. This is despite the fact that the ultimate beneficiary of the work is also a natural person who uses the property as a home’.
See the full article in El País. Thank you very much @Ilier Navarro for having Lener for this analysis.➡️
