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IVA payments on new builds

IVA payments on new builds

Old Jul 16th 2016, 12:12 pm
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Default IVA payments on new builds

I have bought some land in Spain and are in process of engaging a builder.

He tells me that many of his clients et up as a developer and as such he cannot charge them 10% IVA, thus making the build 10% cheaper.

Does anybody have experience of this ?

Thanks in anticipation of some good advice.

A
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Old Jul 16th 2016, 12:40 pm
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Default Re: IVA payments on new builds

Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

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Old Jul 17th 2016, 11:39 am
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Default Re: IVA payments on new builds

He will probably tell you he prefers to work with cash as well ! 10% IVA is required when a new build is finished and "delivered" by the builder or the promoter to the owner. .
If for complex reasons the builder wriggles out of IVA the alternative tax ITP - transfer Tax basically kicks in but that would be in a scenario in which the builder "sells the property" so it is no longer a new build.
As an "Auto Promotor", which is what he is telling you to do you have two tax elements :
1. On the land you have bought - the ITP
2. IVA at 21% to the Architect and project manager, IVA at 10% to the builder and, if you buy the materials yourself you will not be able to deduct the IVA on the materials.
Go chat to a local lawyer is the best bet.
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Old Jul 17th 2016, 1:17 pm
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Default Re: IVA payments on new builds

I agree with that. We built as the "promotor" and paid the builder IVA.
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