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V1781-17 10 July 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Leasing of residential properties without hospitality services is exempt from VAT

A query was raised regarding whether the rental of two apartments without additional services is subject to VAT. The DGT has determined that, as services characteristic of the hotel industry are not provided, the activity is exempt.

The question raised

Exemption from Value Added Tax.

The DGT's ruling

The lease of real estate intended exclusively for residential use is subject to and exempt from VAT, provided that no complementary hotel industry services (such as cleaning or restaurant services) are provided. The exemption is purpose-driven and depends on the effective use of the building as a residence. If hotel services are provided or if it is intended for other uses such as offices, the transaction shall be subject to and not exempt from VAT.

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