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V0237-18 1 February 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · entrega de bienes

Allocation of housing after two years of third-party leasing may be exempt from VAT

A housing cooperative has requested clarification on whether the final allocation of housing is exempt from VAT after being leased uninterruptedly to non-member third parties for more than two years. The DGT has ruled that if the tenants were different from the final allocatees and the period exceeded two years, the transaction is subject to VAT but exempt.

The question raised

1st.- Whether the exemption provided for in Article 20.One.22 of Law 37/1992 applies to the delivery of dwellings that have been leased, prior to their final adjudication, uninterruptedly for more than two years to third parties who are not members of the cooperative and whether, in this case, they would be subject solely to the Stamp Duty modality of the Transfer Tax and Stamp Duty.

The DGT's ruling

The final adjudication of dwellings constitutes a supply of goods subject to but exempt from VAT if the previous lessees were persons other than the adjudicatees and the lease term has exceeded two years. If the previous contracts were lease-purchase or similar, the accrual would occur at the commencement of said leases. Regarding Transfer Tax, no response can be provided as it was not formulated by the taxpayer.

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