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V2951-19 23 October 2019 · SG de Impuestos sobre el Consumo Criterion in force
IVA · exención

Leasing of lofts to individuals for residential use is VAT exempt if no hotel services are provided

A company requested clarification regarding the application of VAT to the leasing and sale of lofts intended for residential use. The DGT ruled that leasing is exempt provided the use is exclusively residential and no hotel services are provided; however, the sale will be subject to 21% VAT if the properties lack a certificate of first occupancy.

The question raised

Application for Value Added Tax purposes of the exemption provided for in Article 20.One.23º of Law 37/1992, in the case of the leasing of lofts.

The DGT's ruling

The leasing of real estate intended exclusively for residential use is exempt from VAT when the lessee is a natural person and no complementary hotel industry services are provided. For the transfer of real estate, the reduced rate of 10% shall apply only if the properties possess a certificate of habitability or a first occupancy license and are suitable for residential use. As such a license is not available at the time of delivery, the sale shall be taxed at the general rate of 21%.

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