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V1282-19 6 June 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · inversión del sujeto pasivo

Rental of a residential building is subject to 21% VAT; construction governed by passive investor investment

A local council asks about VAT treatment on construction and subsequent rental of a building for elderly residents. The DGT states that the rental is subject to general VAT due to commercial subletting, and construction is governed by passive investor investment.

The question raised

Question raised: Taxation of the operation for Value Added Tax purposes. Application of the reverse charge rule.

The DGT's ruling

The leasing of the residence to the concessionaire entity is subject to and not exempt from VAT at the general rate of 21%. The construction of the building shall be taxed at the reduced rate of 10% if it is intended for permanent residential use and more than 50% of the surface area is for such use. In the execution of the work, the reverse charge mechanism shall apply as it is a construction of buildings between a developer and a contractor.

Apply this to a real case

What is published here, applied to a company or a specific case. The first meeting is free.

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