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V0477-18 21 February 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
OTRO · arrendamiento con opción de compra

Delivery of housing through exercise of purchase option subject to ITP and AJD if exempt from VAT

The inquirer asks whether acquiring a property by exercising a purchase option in a lease agreement is subject to VAT or to ITP and AJD. The DGT determines that, as it constitutes a second delivery of a building carried out by a non-developer, the transaction is subject to but exempt from VAT, which results in liability for ITP and AJD.

The question raised

The taxpayer wishes to know whether the acquisition will be considered a first or second transfer for Value Added Tax purposes and if, consequently, it will be taxed under Value Added Tax or under Transfer Tax and Documented Legal Acts Tax.

The DGT's ruling

If the lessor is not a developer, the delivery of the dwelling through the exercise of a purchase option is considered a second delivery subject to and exempt from VAT. As it constitutes a delivery of real estate exempt from VAT, the operation is subject to the transfer tax modality of ITP and AJD pursuant to article 7.5 of the TRLITPAJD. In this case, the variable rate of AJD is not applicable due to incompatibility with the transfer tax modality.

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