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V0499-16 8 February 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption applicable if new home is purchased two years prior to selling current one

The inquirer asks whether the reinvestment exemption can be applied if a new home is purchased before selling the current one. The DGT rules that this is possible, provided that an amount equivalent to the proceeds from the sale is reinvested within a two-year period, whether before or after the sale.

The question raised

Possibility of considering the capital gain obtained from the transfer of the current primary residence exempt due to reinvestment.

The DGT's ruling

To qualify for the exemption, the acquisition of the new dwelling must take place within the period of two years prior to or following the transfer of the previous one. It is not necessary for the funds obtained from the sale to be the same as those used for the purchase, due to the fungible nature of money. It is sufficient that the amount invested in the new dwelling is equivalent to or greater than the amount obtained from the transfer of the old one. The exemption shall be partial if the amount reinvested is less than the total amount obtained.

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