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V2448-19 13 September 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · autopromoción

Transfer of a building under construction is subject to the standard 21% VAT rate

A taxpayer intends to acquire a property currently under construction for the self-build of their main residence. The DGT has ruled that, as the works are not yet complete, neither the exemption for the first supply nor the reduced VAT rate applies.

The question raised

Applicable tax rate for the acquisition of the building under construction described.

The DGT's ruling

The supply of buildings under construction or unfinished is subject to and not exempt from VAT when carried out by a businessperson or professional. To apply the reduced rate of 10%, the building must be completed and fit for use as a dwelling, possessing a certificate of habitability or a first occupancy license. As it concerns a building in progress, the transfer is taxed at the general rate of 21%.

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