Spain’s Supreme Court Rules on Reduced VAT for Incomplete Homes

• Spain’s Supreme Court ruled that the absence of a certificate of habitability or occupancy license does not automatically prevent the application of the reduced VAT rate for new home transfers.
• The court based its decision on CJEU case law, which considers a building suitable for use as a dwelling when it is completed and built for permanent residence.
• The court clarified that the reduced VAT rate applies only to transactions qualifying as housing deliveries, not to transactions related to housing classified as services.
• The court emphasized that administrative requirements, such as certificates, should not invalidate the physical characteristics of a building.
• The court noted that delaying the reduced VAT rate due to bureaucratic procedures would be inconsistent with the economic reality of completed housing units.
• The court stated that the sale of tourist apartments is subject to the general VAT rate because they do not qualify as “housing” for permanent residence.

Source: bdo.global

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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