Did you know that a reduced VAT is applied to home renovations?
That’s right, if you’re still in the phase of calculating your renovation budget, it is key that you know the VAT rate that applies to home renovations. We are talking about a VAT reduced to 10%, which means a big difference in the total amount of the cost of a comprehensive renovation. .
In this post we will answer some of the main questions that revolve around this question: what is the 10% reduced VAT on home renovations? When is it applied? On what occasions can it be used?
What is the 10% reduced VAT on home renovations?
VAT reduced to 10% is an initiative that is applied in the renovation sector with the aim of making the construction of more sustainable, comfortable and personalised homes more accessible. More than a figure, it is a door to possibility:
the possibility of renewing the plumbing without fear of the final numbers, of updating the electrical system to make it more efficient, or of giving your walls that color that reflects your personality so much. Woodworking, painting, and more, everything falls into this range of opportunities where quality meets accessibility.
This benefit, however, comes with its small print: this reduction is subject to certain requirements. Mainly, the reduced VAT on renovations is applicable to homes at least two years old and meant to be the setting for your life, not your business.
Although these are the two main requirements, there are a few more that we tell you about below.
When is reduced VAT applied in the renovation of a home
Understanding the legal and fiscal framework is essential for a smooth reform. Reduced VAT is part of a policy to promote the improvement of housing, but It is important that your project meets the established criteria.
- The cost of materials should not exceed 40% of the total budget .
- Vitally important, keeping construction permitsand certificates up to date is critical to qualifying for reduced VAT.
- The professionals hired to carry out the renovation must have the relevant certificates and registrations that ensure the quality and legal conformity of the work.
- The home must be for private use and not intended for rent. In the case of communities of owners, this benefit will not apply if the invoice is in the name of the property administrator or the insurance company.
- This reduced VAT rate is valid for any home, whether it is a first or second home, as long as the construction has been completed at least two years before the renovation works begin.
- Reduced VAT on a renovation can be applied to various renovation or repair works, such as painting, installation of systems, renovation of elevators, or safety improvements, such as fire protection.
Keys to ensuring the enjoyment of reduced VAT in your renovation
Taking the step of making a comprehensive renovation is a complicated decision that needs security and guarantee in every detail. That is why, from Kaleidsocope we want to give you some tips to serve as a guide when it comes to knowing if you can count on VAT reduced to 10% in your renovation.
- Expert Consultations: Given the complexities of tax laws and regulations, consulting an expert is not a luxury, but a necessity. A tax advisor or real estate lawyer can offer clarity, making you make the most of the tax opportunities available, including reduced VAT.
- Quality and compliance: choosing the right professionals to carry out your renovation is essential for the structural integrity, legal compliance and tax optimisation of your project.
- Innovation in materials and techniques: The choice of materials and construction techniques also has a significant impact on the long-term sustainability and efficiency of your renovation. Let’s take a look at how innovation in this field, combined with the incentive of reduced VAT on renovations, can transform your renovation project.
- Sustainable materials: The trend towards eco-friendly and sustainable materials is booming. From certified woods to eco-friendly paints and natural insulation, these materials are better for the environment and can also be optimised for use thanks to reduced VAT, making them more accessible for your project.
- Advanced techniques: Implementing advanced construction techniques, such as 3D printing in construction or modular assembly systems, can speed up construction times and improve energy efficiency of your home. The application of reduced VAT to these services makes the adoption of innovations a viable and attractive option.
- Energy efficiency: Integrating solutions that improve energy efficiency, such as triple-glazed windows or state-of-the-art heating and cooling systems, reduces your carbon footprint and you can also benefit from reduced VAT on renovations, representing a smart investment for the future of your home.
- Durability and maintenance: Choosing materials and techniques that offer greater durability and require less maintenance can result in significant savings in the long run. Reduced VAT encourages this initial investment in quality, ensuring that your renovation remains in optimal condition for years.
This is why having a team of professionals is the key to ensuring that there are no surprises during the process of your renovation.
At Kaleidoscope, we know that budgeting is a vital part of any renovation project. We are committed to providing you with clarity and support at every step, ensuring that your project not only meets your expectations for design and functionality but also benefits from tax incentives such as reduced VAT.
Contact Kaleidoscope and take the first step to transform a home into the home of your dreams. Together, we can make your next renovation project a Smart and sustainable investment in which you can save yourself a good pinch.
