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V2450-23 13 September 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · disolución del condominio

Dissolution of a co-ownership with excess adjudication is subject to VAT if the transferor is a business owner

An association has enquired whether the dissolution of a co-ownership of urban properties attracts VAT on the allocated assets or only on the excess adjudication. The DGT has ruled that the transfer of rights regarding the excess adjudication is subject to VAT if the transferor is a business owner or professional, whereas cash payments are not subject to the tax.

The question raised

The applicant wishes to know, for the purposes of Value Added Tax, whether the dissolution of the co-ownership triggers the aforementioned tax on the assets adjudicated to each participant or only on the excess adjudication.

The DGT's ruling

The transfer of a plot of land due to excess adjudication in the division of common property is an operation subject to VAT if the transferor has the status of entrepreneur or professional. In this case, the acquirer of the excess must bear the tax impact and receive an invoice. Conversely, the cash payment made to compensate for said excess is not subject to the tax as it constitutes a delivery of money.

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