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Demolition: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 19 rulings · 2015–2025

Current position

The delivery of buildings intended for demolition prior to a new urban development project is subject to IVA (Value Added Tax) at the general rate of 21%. The exemption for second deliveries or the exemption for land with buildings subject to the tax does not apply. Expenses derived from the demolition are considered an increase in the acquisition value of the land for future transfers.

The DGT's position remains constant in classifying demolition as an operation subject to the general rate. Throughout the rulings, it has been reaffirmed that the delivery of buildings for demolition does not constitute an exempt second delivery, but rather a payment in kind towards the land. Likewise, the treatment of demolition costs as an increase in the value of the land has been consolidated.

Turning points

  1. V5375-16

    Establishes that demolition operations are not works executions for construction and must be taxed at the general rate of 21%.

  2. V2172-17

    Defines the delivery of a building intended for demolition as a payment in kind towards the future delivery of real estate.

Analysis based on 19 of 19 rulings with a stated position. Updated 25 September 2026.

Rulings on this topic

19
V1611-22 4 Jul 2022

Building demolition costs treated as increased acquisition value of land

SG de Impuestos sobre la Renta de las Personas Físicas
ganancia patrimonialvalor de adquisicióninversiones y mejorasdemolicióntransmisión de bienes LIRPF — Ley 35/2006 del IRPF art. 33.1LIRPF — Ley 35/2006 del IRPF art. 34
Affects CompanyExpat · Non-residentIndividual
V5375-16 20 Dec 2016

Demolition works and archaeological studies subject to 21% VAT

SG de Impuestos sobre el Consumo
tipo impositivoejecución de obraspromotordemoliciónestudios arqueológicos LIVA — Ley 37/1992 del IVA art. 90.UnoLIVA — Ley 37/1992 del IVA art. 91.Uno.3.1º
Affects CompanyExpat · Non-residentIndividual

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