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V2695-17 23 October 2017 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

VAT exemption for housing rentals by non-profit organisations when the tenant is not a business

A non-profit association renting properties to provide free housing to people at risk of social exclusion has requested clarification on whether these transactions are subject to VAT. The Spanish Tax Agency (DGT) has ruled that such rentals are exempt, provided the tenant acts as a final consumer rather than a business or professional.

The question raised

Liability and, where applicable, exemption.

The DGT's ruling

Non-profit associations are VAT taxable persons when they carry out economic activities on a continuous basis and assume risks. The leasing of real estate for residential purposes is exempt if the lessee is the final consumer, even if they allow other persons to use the dwelling. If the lessee does not have the status of entrepreneur or professional, the rental of the dwelling shall be exempt from VAT even if it is assigned to third parties.

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