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V1161-18 8 May 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · primera entrega

Subsequent residential sales following purchase from a developer will be subject to and exempt from VAT

A construction company sought clarification on whether the sale of residential properties acquired from a developer constitutes a first or second delivery of buildings. The DGT ruled that, as the initial purchase represents the first delivery, the subsequent sales by the company will be treated as subject and exempt operations.

The question raised

Whether the transfer of these properties constitutes a first or second supply of buildings and its taxation under Value Added Tax.

The DGT's ruling

The acquisition of dwellings by a company from the developer constitutes the first supply, which is subject to and not exempt from VAT. Therefore, subsequent transfers carried out by the taxpayer are considered second or subsequent supplies of buildings, which are subject to and exempt from VAT pursuant to Article 20.One.22 of Law 37/1992. However, this exemption shall not apply if the dwellings have been subject to rehabilitation works under the terms of section B of the same article.

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