The reduced VAT rate of 5% can be applied to home repair or renovation services, provided that the property in question is used as a “permanent dwelling or vacation home”. So says the European Court of Justice (ECJ).
According to the newspaper ECO, which quotes the ECJ’s ruling, the end consumer who lives in the house being renovated can benefit from a reduced VAT rate, but only on the repair or renovation services – and not on the materials.
Furthermore, for a property to be considered effectively inhabited, it does not have to be a permanent dwelling. Vacation homes are also covered.
This excludes properties that are licensed for residential purposes but are not actually used for that purpose on the date the repair or renovation services in question are carried out.