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V5450-26 6 August 2026 · SG de Impuestos sobre el Consumo Criterion in force
IVA · tipo reducido

10% reduced VAT rate does not apply if urban planning restrictions prevent residential use

A company inquired whether the transfer of renovated buildings could qualify for the reduced VAT rate for housing. The DGT ruled that if urban planning restrictions prevent changing the use from office to residential, the reduced rate cannot be applied.

The question raised

Whether the reduced rate provided for in Article 91.One.1.7º of Law 37/1992 would apply to the transfer of finished buildings to be carried out by the applicant.

The DGT's ruling

To apply the 10% rate, the building must be suitable for use as a dwelling according to its objective characteristics and its possible legal purpose. If there is a legal urban planning prohibition that prevents buildings from being considered suitable for residential use, the transfer must be taxed at the general rate of 21%.

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