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V0397-18 15 February 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption cannot be applied if the sale of the property results in a capital loss

A taxpayer inquired about the amount required to reinvest in a new home to qualify for the reinvestment exemption after selling their primary residence. The Directorate General for Taxes (DGT) ruled that if the sale results in a capital loss, the exemption does not apply.

The question raised

What would be the amount to be reinvested in the new residence in order to qualify for the reinvestment exemption.

The DGT's ruling

The exemption for reinvestment in the primary residence provided for in Article 38 of Law 35/2006 is only applicable in cases of obtaining capital gains. Since a capital loss occurs upon transfer, the application of this exemption is not permissible.

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