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V1363-23 22 May 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · permuta de suelo

Exchange of land for future construction taxed at 21% for the plot and 10% for dwellings and outbuildings

A real estate company has requested a ruling on the VAT treatment regarding the exchange of a plot of land for future dwellings, garages, and storage rooms. The DGT has determined that the delivery of the land is subject to the standard rate, while the delivery of the building constitutes a payment in kind.

The question raised

Treatment for Value Added Tax purposes of said operation.

The DGT's ruling

The land swap operation for future construction comprises three stages: the delivery of the land, the delivery of the completed building, and a payment in kind on account. The delivery of the plot is taxed at 21% as it is land. The payment in kind (the plot) accrues the VAT of the future building at the time of collection. Dwellings, garages, and annexed storage rooms are taxed at the reduced rate of 10%.

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