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V0340-23 20 February 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Requirements to claim reinvestment exemption in primary residence

A taxpayer who transitioned from non-resident to resident status asks whether they can claim the reinvestment exemption when selling their current home. The DGT clarifies that the property must have been their primary residence at the time of sale or within the two years prior.

The question raised

Possibility of applying the exemption for reinvestment in a habitual residence for Personal Income Tax purposes.

The DGT's ruling

To apply the exemption under Article 38 of the Personal Income Tax Law (LIRPF), the transferred property must be the taxpayer's habitual residence at the time of sale or have been so on any day during the two preceding years. Habitual residence requires continuous residence for at least three years, except in exceptional circumstances. The status of habitual residence is a question of fact that must be proven, and simple registration in the municipal register is insufficient.

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