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V0126-24 15 February 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Two-year deadline for principal residence reinvestment exemption cannot be extended

The applicant inquired whether the two-year period for reinvesting proceeds from the sale of their principal residence could be extended due to circumstances beyond their control, or if a notary deed would suffice to meet the requirement. The DGT ruled that the deadline is strict and does not allow for extensions, nor is a notary deed considered a reinvestment without the legal acquisition of the property.

The question raised

1st Possibility of extending the two-year period to reinvest, while maintaining the right to exempt from taxation the capital gain generated in the transfer of the primary residence, considering delays not attributable to the taxpayer. In the negative case, whether the requirements would be met through the formalization of a Deed of Declaration before a notary, where the spouse with full capacity details that the sale will take place within a short period from the Court's ruling.

The DGT's ruling

For the reinvestment exemption, the acquisition of the new dwelling must occur within the two years following the transfer of the previous one. The regulations do not provide for extensions of this period for the reasons alleged. Furthermore, the formalization of a deed before a notary does not constitute the legal acquisition of the dwelling, and therefore does not fulfill the reinvestment requirement. Finally, works carried out before exercising the purchase option do not count as a reinvested amount as the individual is not the holder of full ownership.

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