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V1451-18 30 May 2018 · SG de Impuestos sobre el Consumo Criterion in force
IVA · terreno rústico

Transfer of property with buildings may be VAT exempt if land is rural or building is ruinous

A query was raised regarding the VAT treatment of acquiring property consisting of land and an old building. The DGT determines that liability depends on the nature of the land (rural, in an urban area, or a building plot) and the condition of the building.

The question raised

Taxation of the operation within the scope of Value Added Tax.

The DGT's ruling

The transfer of rural or non-buildable land with embedded constructions is exempt if they are indispensable for an agricultural exploitation or if the construction is ruinous or dilapidated. There is no exemption if the land is a building plot, is buildable, or is undergoing urbanization (when physical transformation costs have been incurred). If the building is finished and is not ruinous, the exemption for second and subsequent transfers could apply under certain requirements.

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