Update | Demolition and reconstruction: reduced rate of 6% in 2024

Extension of transitional measures until 30 June 2025
The application of the reduced VAT rate of 6% to demolition and reconstruction underwent major changes in 2024, see our previous publication. 

In this context, transitional measures have been adopted for current projects, allowing the 6% VAT rate to continue to apply under certain conditions until 31 December 2024.

Following the exceptional weather conditions observed in 2024, particularly during the month of October, a six-month extension to this transitional regime has just been adopted. The original deadline of 31 December 2024 has been replaced by 30 June 2025. 

The table below summarises the transitional arrangements applicable in 2024 and 2025.
 
Type of transaction Conditions Transitional regime

Delivery of a residential building to a natural person for use as his or her own and sole dwelling, with a maximum floor area of 200 m², and with an obligation to remain in the building for a minimum of 5 years from 1/01 following the year of first occupation/use.

Planning permission for operations relating to the reconstruction of the building must be submitted no later than 30/06/2023. VAT rate of 6% for VAT due no later than 31/12/2024
-> EXTENSION to 30/06/2025
Delivery of a residential building to a natural or legal person with a view to long-term social renting. Planning permission for operations relating to the reconstruction of the building must be submitted no later than 30/06/2023. VAT rate of 6% for VAT due no later than 31/12/2024
-> EXTENSION to 30/06/2025
Permanent regime for the 32 urban areas. Planning permission for operations relating to the reconstruction of the building must be submitted no later than 31/12/2023. VAT rate of 6% for VAT due no later than 31/12/2024
-> EXTENSION to 30/06/2025


For more information on the new regimes applicable from 2024, see our previous publication and the summary table below. 
 
Type of transaction Old schemes (until 31/12/2023) Final scheme (from 1/01/2024)
Building work (natural person) - owner's own, single dwelling (max. 200 m²) with residence for a minimum of 5 years (from 1/01 of year N+1). 6% (the whole country, except 32 urban areas) 6% (the whole country)
Building work (individual/corporate entity) - residential building leased by the project owner for a minimum period of 15 years. 6% (the whole country, except 32 urban areas) 6% (the whole country)
Delivery (natural person/legal entity) for:
  • the purchaser's own, single dwelling (max. 200 m²), subject to a residence requirement;
  • a residential building let on a social lease by the buyer (minimum 15 years).
 6% (the whole country) 21% (the whole country)
Building work in 32 urban areas (individuals/corporate bodies). Permanent regime: 6% Repeal
Building work (individual/corporate entity) - residential building let by the project owner for 15 years (max. 200 m² + main residence)  21% (the whole country, except 32 urban areas without "social" conditions or duration) 6% (the whole country) (effective from 1/06/2024)
 

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