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V2810-20 16 September 2020 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
ITPAJD · concesión administrativa

Authorisation to use a private asset for public use is subject to ITP and AJD as an administrative concession

A homeowners' association inquired whether municipal authorisation to install a fence in an area that is privately owned but for public use is subject to ITP and AJD, particularly if no fee is paid. The DGT ruled that it does constitute a taxable event due to the resulting transfer of assets.

The question raised

Whether the granting of the aforementioned authorization is subject or not to the provisions of Articles 7.b) and 13.2 of the Consolidated Text of the Tax on Property Transfers and Documented Legal Acts, and whether the transfer of assets referred to in Article 13.2 of the Consolidated Text occurs, taking into account that the ownership of the real estate upon which the fence is to be placed is private to the homeowners' association and said authorization would not yield any type of profit and/or income to the association, and it is requested that it be granted without payment of any fee. In the event of an affirmative response, the question is raised as to what the tax base would be, given that the authorization is requested without payment of an authorization fee or canon to the city council.

The DGT's ruling

The authorization for the special use of an asset which, while being private property, is for public use, is equated to an administrative concession pursuant to Article 13.2 of the TRLITPAJD. This generates a transfer of assets that allows for taxation under the modality of onerous asset transfers. If no fee or consideration exists, the tax base shall be determined by the supplementary rules set forth in paragraph 4 of Article 13 of the aforementioned consolidated text.

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