{"id":22935,"date":"2025-10-02T09:01:47","date_gmt":"2025-10-02T09:01:47","guid":{"rendered":"https:\/\/www.asesoriaorihuelacosta.com\/?p=22935"},"modified":"2025-05-01T02:48:05","modified_gmt":"2025-05-01T02:48:05","slug":"how-to-waive-the-vat-exemption-on-the-purchase-of-premises","status":"publish","type":"post","link":"https:\/\/www.asesoriaorihuelacosta.com\/en\/how-to-waive-the-vat-exemption-on-the-purchase-of-premises\/","title":{"rendered":"How to waive the VAT exemption on the purchase of premises?"},"content":{"rendered":"\t\t
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It is rare but many people do not know that they can pay less tax when buying premises, even in some cases when buying a house. The key phrases are “waiver of VAT exemption” and “reverse charge<\/strong>“.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/section>\r\n\t\t\t\t

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How not to pay ITP or VAT on the purchase of a real estate property<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/section>\r\n\t\t\t\t
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\u00a0But what does it mean to pay less tax?<\/strong><\/p>

It means not paying VAT and not paying ITP.<\/h2>

And you may ask, how is it done? ????<\/p>

When you buy a second hand property<\/strong> in Spain you have to pay a tax called transfer tax, the famous ITP<\/strong> (Impuesto sobre Transmisiones Patrimoniales).
On the other hand, when you buy a new property<\/strong>, you have to pay the VAT<\/strong> (IVA) value added tax (and the AJD).<\/p>

Both taxes VAT vs ITP are incompatible.<\/h3>

When you buy a second hand property you are exempt from paying VAT and pay ITP. When you buy a new property you pay VAT (and ADJ) and do not pay ITP.<\/p>

VAT: Value Added Tax.<\/p>

ITP: Property Transfer Tax.<\/p>

ADJ: Documented legal acts.<\/p>

In the sale and purchase of second hand real estate you are exempt from paying VAT because you have to pay ITP (Impuesto sobre Transmisiones Patrimoniales).<\/p>

Well, by fulfilling certain requirements you can waive the VAT exemption and request to be taxed or pay VAT.<\/p>

And here is the clue,<\/strong> if the seller and buyer, in the normal course of their business,<\/strong><\/span> sell and buy a property, the responsibility for paying VAT is transferred to the buyer who, in his VAT return, makes a note of the amount of VAT payable in the VAT due or charged and another note in the VAT to be refunded.<\/p>

Both amounts are cancelled and no VAT is paid.<\/h4>

Interesting, isn’t it?<\/p>

Let’s take a closer look at how the VAT exemption waiver works.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/section>\r\n\t\t\t\t

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What is the waiver of the IVa exemption?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/div>\r\n\t\t\t\t\t<\/div>\r\n\t\t\t\t<\/section>\r\n\t\t\t\t
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What does the waiver of VAT in Spain consist of?<\/h3>


When does ITP have to be paid?<\/h4>

Second and subsequent sales of real estate (in general, those not carried out by the developer or builder) are exempt from VAT.<\/p>

In these cases, the buyer must pay Transfer Tax (ITP) at a rate of between 6 and 11% on the reference value of the property (depending on the autonomous community).<\/p>

And if the buyer is an entrepreneur, this tax will mean a higher depreciation cost (as the ITP, unlike VAT, is not deductible).<\/p>

Waiver of VAT exemption<\/h3>

Well, if you or your company is going to buy a property and you want to avoid this higher cost, you can ask the seller to waive the VAT exemption, so that the purchase is taxed by VAT instead of ITP.<\/p>

For this to be possible, the following requirements must be met:<\/p>