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VAT practical manual 2022.

Real-estate exemptions

The following operations are exempt :

  • Deliveries of rural land and others that do not have the status of buildable land and those destined exclusively for public parks and gardens or road surfaces for public use.

  • Second and subsequent deliveries of buildings, including the land on which they are located, when they take place after their construction or rehabilitation has been completed.

    Building rehabilitation concept:

    Building rehabilitation works will be considered those that meet the following requirements:

    1. That its main object is the reconstruction of the same, this requirement being understood to be fulfilled when more than 50 percent of the total cost of the rehabilitation project corresponds to works of consolidation or treatment of structural elements, facades or roofs or with works analogous or related to them. those of rehabilitation.

    2. That the total cost of the works to which the project refers exceeds 25 percent of one of the following amounts:

      • Of the acquisition price, if the building had been acquired during the two years immediately prior to the start of the rehabilitation works.

      • Of the market value of the building or part of it at the time of the start of the rehabilitation works, if said start takes place after 2 years have passed since the acquisition of the building.

        In both cases, the proportional part corresponding to the land will be deducted from the acquisition price or the market value of the building.

    The following works will be considered analogous to rehabilitation works:

    1. Those of structural adaptation that provide the building with conditions of constructive safety, so that its stability and mechanical resistance are guaranteed.

    2. Those of reinforcement or adaptation of the foundation, as well as those that affect or consist of the treatment of pillars or slabs.

    3. Those for expansion of the built surface, above and below ground.

    4. The reconstruction of facades and interior patios.

    5. Those for the installation of lifting elements, including those intended to overcome architectural barriers for use by the disabled.

    Works related to rehabilitation will be considered

    Those mentioned below when their total cost is lower than that derived from the works of consolidation or treatment of structural elements, facades or roofs and, where appropriate, works analogous to these, provided that they are inseparably linked to them. and do not consist of the mere finishing or decoration of the building or the simple maintenance or painting of the façade:

    1. The works of masonry, plumbing and carpentry.
    2. Those intended for the improvement and adaptation of enclosures, electrical installations, water and air conditioning and fire protection.
    3. The works of energetic rehabilitation.

    Energy rehabilitation works will be considered:

    Those aimed at improving the energy performance of buildings by reducing their energy demand, increasing the performance of thermal systems and installations or incorporating equipment that uses renewable energy sources.

    For the purposes of VAT the following are considered first deliveries:

    Deliveries by the developer of buildings whose construction or rehabilitation is completed, unless they have been used for a period equal to or greater than 2 years and are acquired by a person other than the one who used it during said period.

    The exemption does not apply to deliveries made by financial leasing companies in the exercise of the purchase option inherent to these contracts, provided they have a minimum duration of 10 years or to deliveries for its immediate rehabilitation or demolition and subsequent promotion.


    A developer has built a building with the following purpose:

    • The ground floor has been used as company offices since January of year “n”
    • The first one has been rented to Mrs. A since February of year “n”.
    • The second has been rented to Mr. B since October of year “n”.
    • The third has been rented to Mr. C since January of year “n”.
    • The room is unoccupied.

    He sells the entire building to Mrs. A in September of year “n + 2”. The following deliveries occur:

    1. Subject and not exempt because they are first deliveries:

      • The acquisition of the first apartment that Mrs. A herself had rented, regardless of the period of use.

      • The acquisition of the second floor that has been rented to Mr. B for a period of less than 2 years.

      • The acquisition of the fourth floor that has been unoccupied.

    2. They will be exempt because they are second deliveries:

      • The ground floor occupied by the developer himself for a period of more than 2 years.
      • The third rented to Mr. C for a period of more than 2 years.
  • Leases and the constitution and transmission of real rights of enjoyment and enjoyment, which have as their object the following assets:

    1. Land, including real estate buildings of an agricultural nature used for the exploitation of a rural property.


      The transfer of a rural property to a commercial company to carry out the extraction of marble is not exempt since the object of the operation is the transfer of a right to extract marble and acquire its property and not the simple transfer of use of the land.

    2. Buildings or parts thereof intended exclusively for housing or for subsequent rental by entities managing public housing support programs or entities covered by the special regime of Entities dedicated to the rental of housing, including garages and accessory annexes and furniture, leased jointly with them.


      The rental of a home carried out by a company is not exempt from the tax because it does not have exclusive use for housing as the lessee is a legal entity, regardless of whether the company uses it, subleases it or assigns it to its workers as partial remuneration for their work.

The exemption does not include, among other cases, the lease of land for parking vehicles, for the storage or storage of goods, for exhibitions or for advertising, nor the constitution or transfer of real surface rights.

Exemptions relating to:

  1. Deliveries of non-buildable land.

  2. Second and subsequent deliveries of buildings.

The waiver of the exemption only applies provided that the purchaser:

  1. Be a taxable person acting in the exercise of his business or professional activities.

  2. Have the right to a total or partial deduction of the tax incurred when making the acquisition or, when the above is not met, depending on their foreseeable destination, the acquired goods are going to be used, totally or partially, in carrying out operations that give rise to the right to deduction.