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V2506-18 18 September 2018 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IVA · primera entrega

Purchase of a previously rented property under a rent-to-buy agreement is subject to VAT without exemption

An individual has requested clarification on whether purchasing a property from a developer is exempt from VAT, given that the property was previously rented for more than two years under a lease agreement with an option to purchase. The Directorate General for Taxes (DGT) has ruled that the transaction is subject to VAT without exemption and, consequently, is not subject to Transfer Tax (ITPAJD) on onerous transfers.

The question raised

Taxation of the acquisition of said dwelling.

The DGT's ruling

The delivery of the dwelling by the developer is considered a first delivery, as use through lease agreements with an option to purchase does not exhaust the first delivery even if the term exceeds two years. Since the first delivery is not exhausted, the sale is subject to VAT without exemption. Consequently, the transaction is not subject to the onerous transfer of assets modality of the ITPAJD, but the public deed shall be taxed under the Documented Legal Acts modality.

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