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Subletting: 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 16 rulings · 2016–2024

Current position

The leasing of residential property to an entrepreneur or professional is subject to the general VAT (IVA) rate of 21% if there is an intention to exploit the property through subletting or assignment to third parties. For the operation to be exempt, it must be proven that there is no intention to exploit the property and that the contract specifically designates a particular natural person as the user. The lessee is not permitted to have the power to subsequently designate other occupants.

The DGT's position has remained constant since 2017. The criterion establishes that subletting or the power to designate subsequent occupants invalidates the exemption for residential leasing. Rulings from 2018 to 2021 have reiterated the requirements for the specific designation of the user to avoid being subject to the general rate.

Turning points

  1. V0478-17

    Establishes that the exemption does not apply if the lessee assigns the property in the course of a business activity, such as subletting, thereby making the operation subject to 21%.

Analysis based on 16 of 16 rulings with a stated position. Updated 26 September 2026.

Rulings on this topic

16
V3863-16 13 Sept 2016

Civil companies with commercial purposes and legal personality must pay Corporate Tax

SG de Impuestos sobre las Personas Jurídicas
sociedad civilobjeto mercantilpersonalidad jurídicacontribuyenteatribución de rentas LIS — Ley 27/2014 del Impuesto sobre Sociedades art. 7.1.aRGAT — RD 1065/2007, Reglamento General de Actuaciones Tributarias art. 24.2
Affects CompanyExpat · Non-residentIndividual

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