Skip to content
Back to index
V2190-22 20 October 2022 · SG de Impuestos sobre el Consumo Criterion in force
IVA · promoción inmobiliaria

Registration required for land and building promotion for property sales

A company leasing homes plans to segregate and sell buildable plots and a single-family house. The DGT states that registration under land and building promotion categories is required, and examines VAT applicability for the sales.

The question raised

A.) Whether it is necessary to register under any heading of the Tax on Economic Activities due to the segregation and sale of plots.

The DGT's ruling

For real estate development, it is mandatory to register under headings 833.1 (land development) and 833.2 (building development). The delivery of buildable land is subject to and not exempt from VAT. The transfer of a single-family dwelling with its plot shall, in principle, be a second exempt delivery, unless the exemption is waived or it is subject to rehabilitation or demolition. VAT installments incurred during segregation procedures are deductible if they are allocated to the development activity.

Book your free first meeting