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V0341-22 23 February 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Garage space transfer exempt from VAT if it is a second delivery and not considered a renovation

A taxpayer has inquired whether the sale of a garage space renovated by a developer is subject to VAT. The DGT clarifies that the exemption depends on whether the works performed qualify as a renovation or if the transaction constitutes a second delivery following construction.

The question raised

Exemption from Value Added Tax on the transfer, as well as the procedure to follow if Value Added Tax has been improperly paid.

The DGT's ruling

The delivery of the parking space shall be exempt if it is a second or subsequent delivery following the completion of its construction or rehabilitation. No exemption shall apply if the transfer is the first delivery following rehabilitation works. For the works to qualify as rehabilitation, they must meet a qualitative requirement (more than 50% of the cost in structural elements, facades, or roofs) and a quantitative requirement (cost exceeding 25% of the acquisition price or market value, excluding the land).

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