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V0344-19 18 February 2019 · SG de Tributos Locales Criterion in force
OTRO · impuesto sobre actividades económicas

The sale of real estate acquired through foreclosure is not subject to the Tax on Economic Activities

An association of credit institutions asks whether the sale of real estate obtained following the foreclosure of mortgages due to client default is subject to the IAE. The DGT responds that these operations do not constitute a business activity.

The question raised

The consulting Association wishes to confirm whether taxpayers registered under any of the headings of grouping 81 of the first section of the Tariffs should not be taxed for the Tax on Economic Activities for the transfer of real estate resulting from the foreclosure of insolvent clients.

The DGT's ruling

The sale of real estate acquired by credit institutions through enforcement proceedings against debtors does not meet the requirements of a business activity. These operations do not aim at the production or distribution of goods or services, but rather at the recovery of credits granted in their main activities. Therefore, the taxable event of the Tax on Economic Activities does not occur, provided that the acquisition and sale are a consequence of proceedings to collect credits.

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