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A taxpayer over 65 enquired whether earnest money (arras penitenciales) retained following the cancellation of a sale due to the buyer's fault is exempt from tax. The DGT ruled that since the transfer of the property did not take place, the exemption does not apply.
The ruling clarifies that the tax exemption for the sale of a primary residence requires an actual transfer of ownership; retaining penalty payments for a failed sale is treated as a taxable capital gain under the general tax base.
The tax team reviews your specific situation.
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