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V3051-20 13 October 2020 · SG de Impuestos sobre el Consumo Criterion in force
IVA · autopromoción

Input VAT cannot be deducted on the self-promotion of a property for private use

An architect inquired whether they could deduct VAT on expenses related to the self-promotion of their primary residence. The DGT ruled that the tax cannot be deducted because the activity of self-promotion for personal use does not qualify as a business or professional activity.

The question raised

Possibility of deducting the Value Added Tax amounts that will be incurred in the execution of their residence project.

The DGT's ruling

Architectural services that a professional provides to themselves for their own residence do not constitute self-consumption of services, but rather an internal operation of their activity. However, as the purpose is not the sale or transfer of the residence, but rather private use and its allocation to personal assets, the applicant does not hold the status of entrepreneur in said self-promotion and cannot deduct the VAT incurred.

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