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V2953-23 8 November 2023 · SG de Impuestos sobre el Consumo Criterion in force
IVA · primera entrega

VAT on property transfers may be subject to or exempt depending on whether it is a first supply or intended for renovation

A university has requested clarification regarding the VAT liability and exemptions applicable to the acquisition of a former barracks for conversion into a faculty building. The DGT explains that taxation will depend on whether the transaction constitutes a first or subsequent supply and whether the renovation works meet the specific legal requirements for rehabilitation.

The question raised

Liability and, where applicable, exemption from Value Added Tax regarding the delivery of said real estate property.

The DGT's ruling

The delivery shall be subject to and not exempt from tax if it is a first delivery or if the acquirer carries out renovation works that do not comply with legal requirements. If it is a second or subsequent delivery, it shall be subject to tax but exempt, unless the waiver of exemption is opted for. The classification of the works as renovation is a matter of fact that must be substantiated by means of evidence.

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