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The taxpayer inquired whether they could apply for the reinvestment exemption by using part of the proceeds from the sale of their primary residence to fund renovations on a new property. The Directorate General for Tax (DGT) ruled that improvement works, such as upgrading installations or carpentry, do not constitute rehabilitation.
Taxpayers planning to use sale proceeds for home improvements must be aware that such works do not qualify for the reinvestment exemption, which is strictly reserved for rehabilitation works.
The tax team reviews your specific situation.
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