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V2893-14 29 October 2014 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Residential leases are exempt from VAT if the tenant is not a business or professional

A foundation leasing residential properties to provide them free of charge as shelters for immigrants has enquired whether these leases are exempt from VAT. The DGT has ruled that the exemption applies provided the tenant does not hold the status of a business or professional for tax purposes.

The question raised

Exemption of residential leases of which the consultant is the lessee.

The DGT's ruling

The exemption for residential leases is purpose-driven and requires that the use be carried out directly by the lessee as the final consumer. If the lessee is an entrepreneur or professional and subsequently assigns the building in the course of their activity, the lease shall no longer be exempt. However, if the lessee does not hold the status of entrepreneur or professional, as occurs when they exclusively provide gratuitous services, the residential lease shall be exempt even if it allows use by other persons.

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