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V0170-22 3 February 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · arrendamiento de vivienda

Residential leasing is exempt from VAT if hospitality services are provided by a third party

A company has enquired whether renting accommodation with additional cleaning or chauffeur services is subject to VAT. The DGT has ruled that residential leasing is exempt, unless the landlord provides services characteristic of the hotel industry; if these services are provided by a third party directly to the client, the rental remains exempt.

The question raised

Whether said lease would be subject and exempt from Value Added Tax.

The DGT's ruling

The leasing of residential property is exempt from VAT provided that the actual use is for residential purposes and services characteristic of the hotel industry are not provided. If the lessor undertakes to provide services such as cleaning or linen changes on a weekly basis, the lease ceases to be exempt. However, if such services are provided directly by third parties to the lessees, the lease remains subject and exempt, with the services being taxed independently.

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