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V0647-23 17 March 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · usufructo

The usufruct of housing may be exempt from VAT if intended for housing support programs

A company inquired whether the granting of usufruct of housing to public bodies for social purposes was exempt from VAT. The DGT responds that the exemption applies if the usufructuary is an entity managing public housing support programs or if the use is for the housing of an end consumer without intention to sublet.

The question raised

Question raised: Whether the granting of usufruct of the housing would be exempt from Value Added Tax regardless of whether they were subsequently leased for consideration or free of charge. Concept of "entities managing public housing support programs". Accrual and taxable base of the Tax in the usufruct of housing. Whether the partial rebilling of the cost of works by the usufructuaries to the inquiring entity would be subject to Value Added Tax.

The DGT's ruling

The usufruct of housing is exempt from VAT when intended for the exclusive use as housing of the lessee or for its subsequent leasing by entities managing public housing support programs. If the usufructuary is an entrepreneur who sublets or grants use to third parties, the operation is subject to the tax, unless it is proven that there is no intention of exploitation and it is intended for a specific natural person designated in the contract. The rebilling of construction costs, as it is neither a disbursement nor an ancillary expense of the usufruct, is considered an independent provision of services subject to the general rate.

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