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V2191-17 22 August 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · renuncia a la exención

Requirements for waiving the exemption on the supply of buildings and land

The applicant inquires about the requirements for waiving the exemption in real estate transactions. The DGT explains that for a supply of a building to qualify as the first supply (subject to VAT), it must be carried out by the developer and must not have been used continuously for two years, while detailing the conditions for waiving the exemption.

The question raised

Requirements required to apply the waiver of the exemption provided for in Article 20.Two of Law 37/1992, on Value Added Tax.

The DGT's ruling

For a delivery of a building to be considered a first delivery and be subject to VAT, it must be carried out by the developer and must not have been used uninterruptedly by its owner or holders of real rights for a period equal to or greater than two years. The waiver of the exemption on the delivery of land or buildings is possible if the acquirer is a taxable person with the right to deduction or if the foreseeable use of the goods enables such a right. Said waiver must be reliably communicated to the acquirer prior to or simultaneously with the delivery and justified by a declaration signed by the latter.

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