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V0436-16 4 February 2016 · SG de Impuestos sobre el Consumo Criterion in force
IVA · primera entrega

Acquisition of a property under construction is subject to VAT at the standard rate of 21%

A taxpayer inquired about the taxation of a single-family house under construction, acquired following a seizure. The DGT ruled that, as the property is not completed, the exemption for subsequent deliveries does not apply, and it must be taxed at the standard rate.

The question raised

Taxation of the acquisition of the dwelling under construction to be carried out by the applicant.

The DGT's ruling

The deliveries of a building under construction or unfinished are subject to and not exempt from VAT when carried out by an entrepreneur or professional. To apply the exemption for subsequent deliveries, it is an essential requirement that the building be completed. In the case of dwellings, construction is considered completed when it is objectively fit for use and possesses a certificate of habitability. Therefore, buildings under construction are taxed at the general rate of 21%.

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