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V0393-26 25 February 2026 · SG de Impuestos sobre el Consumo Criterion in force
IVA · patrimonio municipal del suelo

Sale of municipal land subject to VAT, not exempt

A taxpayer asks whether the sale of a plot by a municipality, previously granted under a urban development agreement, is subject to or exempt from VAT. The DGT rules that the transaction is subject to VAT because the land forms part of the municipality's land patrimony, which has an entrepreneurial character.

The question raised

Whether the transfer of the building plot by the city council shall be subject to, and if applicable, exempt from, Value Added Tax.

The DGT's ruling

The transfer of land forming part of the municipal land assets is considered to be carried out in the course of a business activity. As it concerns a building plot (buildable land), the exemption for non-buildable land provided for in Article 20.One.20º of the VAT Law is not applicable. Therefore, the transfer is subject to the tax at the general rate.

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