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A taxpayer inquired whether funds invested in the comprehensive renovation of a purchased property can be counted as reinvestment for the principal residence exemption. The DGT ruled that works are only considered rehabilitation if they address structural elements and comply with specific cost limits.
This ruling limits the scope of the reinvestment exemption for capital gains tax, requiring that renovation projects must involve structural improvements to qualify as rehabilitation of a primary residence.
The tax team reviews your specific situation.
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