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V0453-24 19 March 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption cannot be applied if the sold property was not the primary residence

The taxpayer asks whether they can benefit from the reinvestment exemption after selling a property that has been rented out for nine years. The Directorate General for Taxes (DGT) rules that this is not possible because the property does not meet the requirement of being the primary residence.

The question raised

Whether one may benefit from the exemption for reinvestment in a habitual residence.

The DGT's ruling

To apply the reinvestment exemption, the transferred property must be the taxpayer's habitual residence, understood as the residence for a continuous period of at least three years. In this case, the property is neither habitual at the time of sale nor during the two preceding years, as it has been leased for 9 years. Therefore, the exemption under Article 38.1 of the Personal Income Tax Law is not applicable.

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