IVA and ICIO on a Renovation in Spain: 10% or 21%, With Worked Examples

Most quotations you compare will be quoted before IVA, and many owners abroad find the tax only when the first invoice arrives. This guide sets out the two taxes that sit on top of a renovation price, the conditions for the lower IVA rate, and worked totals based on rates we publish.

IVA: when it is 10% and when it is 21%

Spanish VAT on renovation work is normally 21%. It is 10% only when all three of these are true, according to the Spanish tax agency (article 91 of Ley 37/1992):

• the client is a private individual using the home privately, not a company and not a property let out as a business;
• the home was built or last rehabilitated more than two years ago;
• the materials supplied by the contractor are no more than 40% of the price of the job.

Two things catch people out. First, appliances are always 21%. Second, the 40% test is why the structure of a quotation matters: when the owner buys the expensive materials directly, the contractor's invoice is mostly labour and can qualify. Non-residents are not excluded by residence alone; what decides it is private use. A holiday home run as a rental business is a different case, and your gestor should confirm which applies to you.

ICIO: the 4% construction tax

Every renovation also triggers the ICIO (Impuesto sobre Construcciones, Instalaciones y Obras), a municipal tax on the real cost of the works. Both Torrevieja and Orihuela charge 4%. The town hall also charges a processing fee that varies by type of works. Neither is optional, and a quotation should say whether they are included. How the filing works, for most renovations a declaración responsable, is in our licence guide.

Four worked totals

Base prices are area multiplied by our published 2026 rate, so they are from figures: €270/m² for a cosmetic refresh and €420/m² for a Standard full renovation. The ICIO is shown on the same base as in our other guides; the amount the town hall assesses is what counts.

Project	Price before tax (from)	With 10% IVA	With 21% IVA	ICIO 4%	Total at 10% / at 21%
70 m² apartment, cosmetic	€18,900	€20,790	€22,869	€756	€21,546 / €23,625
70 m² apartment, Standard full	€29,400	€32,340	€35,574	€1,176	€33,516 / €36,750
90 m² apartment, Standard full	€37,800	€41,580	€45,738	€1,512	€43,092 / €47,250
120 m² villa, Standard full	€50,400	€55,440	€60,984	€2,016	€57,456 / €63,000

The gap between the two IVA rates is €2,079 on the cosmetic job, €3,234 on the 70 m² Standard budget, €4,158 on 90 m² and €5,544 on the villa. These are planning figures, not a quotation: what you sign is the written quotation after a site visit. The rates behind them are explained in what an apartment renovation costs in Torrevieja and cosmetic or full renovation.

If the property is let out

A property used as a rental business does not meet the first condition, so plan the budget at 21% unless your gestor confirms otherwise. A second home that you use yourself and do not let out is a different position from a flat on a holiday-rental platform, and it is the use that decides, not the owner's nationality. If you renovate to let, see renovating to let or sell.

What to check on the quotation

• Is the price before or after IVA, and at which rate?
• Is the ICIO and the town-hall fee included, or yours to pay?
• Are appliances listed separately, since they are always at 21%?
• Who buys the materials, and does the split keep the contractor's materials under 40% if you are aiming for 10%?

The full list of points to compare is in what a builder's quotation must include. For owners abroad, invoices with IVA shown separately are also the paper your gestor will want, see renovating from abroad.

Questions we get asked

Is IVA on a renovation in Spain 10% or 21%?

Normally 21%. It is 10% when the client is a private individual using the home privately, the home is more than two years old and the contractor's materials are no more than 40% of the price of the job (article 91 of Ley 37/1992). Appliances are always 21%.

What is the ICIO and how much is it in Torrevieja?

It is a municipal tax on the cost of the works. Torrevieja and Orihuela both charge 4%, so €1,176 on a €29,400 renovation. The town hall also charges a processing fee that varies by type of works.

Can a non-resident owner get the 10% rate?

Residence alone does not exclude you. What decides it is private use of the home and the other two conditions. A holiday home run as a rental business does not qualify; ask your gestor which applies.

Does a cosmetic refresh pay ICIO too?

Yes. The ICIO applies to renovation works generally, so on a €18,900 cosmetic project the 4% is €756. The cosmetic work normally goes by a declaración responsable, which does not change the tax.

Are your prices before or after IVA?

Before. All rates on our prices page are shown before IVA, and the written quotation states the applicable IVA, so you can compare it with other offers on the same basis.

Get a quotation with the taxes shown

Send the address, the size, the year of construction if you know it and how you use the property. We reply with what is realistic and a written quotation after a site visit, on WhatsApp or by email, in English. Local pages: builders in Torrevieja and Orihuela Costa.

Rates: Creator Company 2026 price list, before IVA. IVA conditions: Agencia Tributaria, Ley 37/1992, art. 91. ICIO: Torrevieja and Orihuela ordinances, 4%. General information, not tax advice for a specific case; ask your gestor.