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V0845-22 20 April 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · arrendamiento de inmuebles

Leasing of property for third-party tourist exploitation is subject to 21% VAT

An individual leases a property to their son for use as a tourist rental. The DGT has ruled that the lease is subject to 21% VAT because the intended use is not residential, and for the owner, it constitutes income from real estate capital.

The question raised

1.) Liability for Value Added Tax regarding the lease carried out by the applicant.

The DGT's ruling

The lease of real estate to be used in the economic activity of a third party does not benefit from the VAT exemption for housing. As it is not a use intended exclusively for housing, the transaction is subject to the general rate of 21%. For the owner, the income constitutes income from real estate capital, and the minimum yield based on kinship must be applied if applicable.

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