Self-building a house

Question

Self-building a house

Nazarov Ivan asks:

Good afternoon! We are going to build a house in Spain in the not too distant future (presumably Valencia). Question 1: Can we independently purchase all materials for building a house? Accordingly, with the firm we conclude a contract for construction and in the estimate will be only construction work without materials. How will this be regulated and reflected in taxes? Question 2: can I, having opened a construction company in Spain, build a house for myself? The legal and tax aspect of this?

10.08.2018

SPAIN. Consultation

Taxes, fees

Expert answers (4)

Tatyana Chernikova (KDGest) · Answer 1 · 2018-09-05T16:06

Good afternoon, Ivan! I will not repeat, answering the first question, I want to complete the second. You can build your own house yourself, without opening a construction company, this is called autoconstruction. At first glance, this is the easiest and most economical option, but based on practice, it is better to look for a construction company with acceptable pricings, tk. You can have difficulties at all stages because of linguistic and bureaucratic barriers, such as elementary ignorance of the characteristics of building materials, difficulties with compulsory 10-year insurance, without which further sale is complicated, etc. But, still it is easier and easier than opening a company to build one house.

Oleg Chubukov · Answer 2 · 2018-08-11T14:30

Good afternoon, Ivan!

I answer in order.
"Question 1: can we independently purchase all materials for building a house?" Yes, you can certainly buy the materials for the house according to your wishes in any stores that are profitable for you.

"Accordingly, we conclude a construction contract with the firm and only construction works without materials will be made in the estimate." All right. But this you are already negotiating with the firm. All work in different ways. Someone provides the material himself. has favorable prices and contracts with different suppliers, and someone only provides work.

"How will this be regulated and reflected in taxes?"
With the further sale of the house, you can deduct the costs of materials and construction works, which will accordingly reduce the amount of income tax that you will receive when selling a house.

"Question 2: can I, having opened a construction company in Spain, build a house for myself?". Undoubtedly you can open a company and build a house yourself, but a number of works that must be performed by licensed specialists, such as an electrician, you still need to order from specialists with such licenses. In theory, if you have qualifications, you can of course obtain such licenses for yourself or your employees, but this is not a very easy process.

Please, we will be happy to help!

Elena Kofeynikova (SpainLuxInvest) · Answer 3 · 2018-08-11T01:03

Good afternoon, Ivan!
Answers:
1) Yes, you can, but in agreement with the construction company to avoid inconsistencies in quality and a sufficient number of those or other materials. Usually, experienced companies conducting construction work have long-term contracts with discounts, and individuals do not receive such discounts.
On tax issues, you need to consult with professional auditors (hestors), since your question is quite extensive and depends on many factors. We can recommend a trusted Russian-speaking auditor who advises you for payment and in person.
2) You can. Also, as above - I can add that this consultation with the Hestor takes at least an hour.
All the best!
Sincerely, Elena

Elena Blashenkova (Selenhome) · Answer 4 · 2018-08-10T15:25

Good afternoon, Ivan!
Writes to you Elena-company Selenhome

Question 1. You can certainly buy all the materials yourself, and accordingly get the cost of the works only for "mano de obra", that is, the implementation of works (without taking into account the materials). Regarding taxes: You will pay 10% VAT on the cost of the work and 21% VAT on materials (I do not know how much it compensates for the final cost, because the construction company VAT return + serious construction companies (read with the annual construction) receive a good discount on materials at wholesale purchase.)

Question 2. You can open a construction company, but for this you need to go through a number of organizational nuances / documents, without which you will not get the right to build. + You will have to hire an administrator who will have the right to sign (if you do not have a work permit in Spain). As for taxes, there are 2 ways:

1) You are a natural person and build for yourself through your company and then pay "purely" 10% of the amount spent, as the company will be able to offset all VAT costs for materials from these 10% since you will have a certain balance received VAT-spent = balance / installment tax.

2) And you also have the opportunity to build a house without paying 10% tax, specifying tax that the house is being built for sale and return all paid taxes on VAT for materials, but this "cunning" will only work until the connection of permanent electricity and water ... Therefore, do not advise it to use in the case of building a house for yourself.

Conclusion: ideally, to find a construction company with which you agree on an open basis for its earnings, and it will provide you with an internal balance (a printout from an account that only works for your construction) for your home with a monthly filling of the table by cost center, taking into account all VAT refunds! To avoid red tape and difficulties with the opening of the company, as well as finding good specialists at good prices! What is gained over the years.

Good luck to you!
Sincerely, Elena Blashenkova.