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V1095-22 19 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · subarrendamiento

Subletting accommodation to students with additional services is subject to VAT (10% or 21%)

A taxpayer plans to sublet properties to students, including catering, cleaning, and internet services. The DGT determines that such subletting is subject to VAT and analyses the applicable rates and the corresponding reduction in Personal Income Tax (IRPF).

The question raised

It is requested to know whether the lessors may apply the reduction for positive net income from housing leases in Personal Income Tax and whether the lease carried out by the owners of the properties is subject to Value Added Tax, as well as whether, in the invoicing carried out for all the detailed concepts, the applicable tax rate would be the reduced rate of 10 percent.

The DGT's ruling

The subletting of housing by an entrepreneur is subject to VAT, and is not exempt due to subsequent assignment in an economic activity. If complementary hotel industry services are provided (such as food or laundry), the subletting is taxed at 10%. If only services such as check-in/check-out cleaning or maintenance are provided, the lease is subject to the general rate of 21%. For Personal Income Tax (IRPF), the 60% reduction does not apply if the lessee does not use the housing as their permanent residence.

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