Skip to content
Back to index
V0826-19 16 April 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · comunidad de bienes

Transfer of property held in joint ownership only attracts VAT if owners act as business entities

A query was raised regarding whether the transfer of property owned by a mother and her children is subject to VAT or Transfer Tax (ITPAJD). The DGT ruled that a community of property is not a taxable person if the owners act independently; instead, each individual is taxed according to their own status as a business entity.

The question raised

Exemption of the transaction for Value Added Tax and for Transfer Tax and Documented Legal Acts Tax.

The DGT's ruling

For a community of property to be a taxable person for VAT purposes, there must be a joint organization of means and a joint assumption of risk and venture. If the owners act independently, each maintains their individual status as an entrepreneur or professional. In this case, only the portion of the participation of those holding the status of entrepreneurs shall be subject to VAT, and the exemption for second and subsequent deliveries of buildings may be applied or waived.

Book your free first meeting