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V0452-20 26 February 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Leasing residential property to an association for onward transfer to third parties is subject to VAT if the end user is not specified in the contract

A social association has enquired whether residential leases intended for subsequent transfer to people at risk of social exclusion are exempt from VAT. The DGT has ruled that, as the end users are not designated in the original contract, the transaction is considered a sublease subject to the standard rate.

The question raised

Whether the exemption provided for in Article 20.One.23.b) of Law 37/1992 applies to leases entered into with third parties and whether, for these purposes, it would be understood as a "managing entity of public housing support programs".

The DGT's ruling

The leasing of housing to an entrepreneur or professional is exempt only if the contract specifically designates the natural person who will be the end user and prohibits assignment to third parties. If the contract allows the lessee to subsequently designate occupants, the transaction is subject to and not exempt from VAT. In the case of the taxpayer, as the dwellings are for different persons, this requirement of specific designation is not met.

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