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V0592-15 13 February 2015 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IVA · adjudicación por subasta

Awarding of urban land via judicial auction may be subject to VAT if the property is used for business activities

A query was raised regarding whether the awarding of urban land following a failed judicial auction is subject to VAT. The DGT indicates that if the property is used for the business activities of the owning company, the transfer will be subject to the tax.

The question raised

Question raised: Taxation of the transaction.

The DGT's ruling

The transfer of an urban plot through forced execution is subject to VAT if the property is used for the development of the transferor's business or professional activities. As it is an urban plot, the exemption for non-buildable land does not apply. The taxable base shall be the total amount of the adjudication consideration, and VAT shall not be considered included in said price unless expressly mentioned in the auction conditions.

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