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The taxpayer asks whether, to qualify for the reinvestment exemption on a primary residence, the proceeds from the sale must be used to pay down the mortgage of the new residence. The DGT responds that the total acquisition value is considered reinvested, even if part of it is financed through a mortgage loan.
This clarification provides certainty for taxpayers planning to upgrade their primary residence, confirming that using a mortgage to fund the new home does not disqualify them from tax relief, provided the total value is accounted for.
The tax team reviews your specific situation.
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