When VAT can be a concern in real estate operations
Real estate
According to the VAT Law, there are certain real estate operations that enjoy exemptions from this tax. Let's dig deeper into these to ensure you are well-informed on this matter.
- VAT Exemption on the Delivery of Non-Buildable Land
In this category, the delivery of rustic lands and others that are non-buildable are exempt. This includes lands that are indispensable for the development of an agricultural operation and those designated exclusively for parks, public gardens, or public use road surfaces.
It is important to note that the condition of buildability is defined by lands classified as building plots and other lands suitable for construction with the corresponding authorization.
- VAT Exemption on Second and Subsequent Deliveries of Buildings
This exemption applies to the second and subsequent deliveries of buildings, including the land on which they are located. It is important to highlight that a delivery made by the developer after two years of continuous use by the owner is not considered a first delivery.
Furthermore, this exemption does not apply to certain situations, such as deliveries of buildings for rehabilitation, among others.
- VAT Exemption on Leases and Constitution and Transfer of Real Rights of Use and Enjoyment
Leases considered as services, along with the constitution and transfer of real rights of use and enjoyment, enjoy VAT exemptions. This includes lands for agricultural operations and buildings intended for housing.
As we explore these exemptions, remember that specific details may vary, and it is always advisable to consult with professionals in the sector.
Waiver of VAT Exemption in Real Estate Operations.
In some cases, acquirers with the right to deduct the supported quotas may choose to waive the exemptions. This decision can have implications, and it is crucial to ensure that the proper procedures are followed in this case.
