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V0117-23 3 February 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · subasta judicial

The adjudication of real estate in a judicial auction may be exempt from VAT if it is a second transfer

A business owner who acquired a premises in a judicial auction asks whether the operation is subject to VAT or exempt, and whether they can recover the paid Transfer Tax (ITP). The DGT explains that, as no VAT was charged, the delivery is an exempt second transfer and, therefore, subject to Transfer Tax (ITP).

The question raised

Question posed: Whether the adjudication of the real estate and its subsequent delivery would be subject to, and if applicable, exempt from, Value Added Tax. If applicable, the possibility of requesting a refund of the Transfer Tax and Stamp Duty settled under the "onerous asset transfers" modality.

The DGT's ruling

The transfer of real estate via judicial auction is subject to VAT if the property was used for the transferor's business activity. However, if it is a second or subsequent delivery of a building, the operation is exempt pursuant to Article 20.One.22 of Law 37/1992. The successful bidder, in their capacity as a business owner, may waive the exemption to charge VAT, acting on behalf and for the account of the taxable person.

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