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V3223-16 11 July 2016 · SG de Impuestos Patrimoniales, Tasas y Precios Públicos Criterion in force
IVA · sujeción

Purchase of urban plot from a company is subject to VAT rather than ITP and AJD

A query was raised regarding whether the purchase of an urban plot from a company (whose activity is not urban development) is subject to VAT or ITP and AJD. The DGT ruled that, as the buildable land is supplied by a taxable person for VAT purposes, the transaction is subject to VAT instead of ITP.

The question raised

Whether the purchase of the plot is subject to Value Added Tax or to Transfer Tax and Stamp Duty, taking into account that the buyer is an individual and the seller is a company.

The DGT's ruling

The transfer of land by a taxable person for VAT is an operation subject to VAT and, therefore, is not subject to Transfer Tax (ITP) and Stamp Duty (AJD). As it concerns an urban plot with buildable status, the transfer is not exempt from VAT. If the operation is documented in a public deed, the variable rate of the Stamp Duty modality shall apply.

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