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V0542-24 9 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for primary residence only covers the portion used for private purposes

A taxpayer inquired whether the exemption for reinvestment in a primary residence could be applied if rooms are rented out in the new property. The Directorate General for Taxes (DGT) ruled that only the proportional share of the capital gain corresponding to the part of the property used for private purposes can be exempt from tax.

The question raised

1. Can the exemption for reinvestment in the habitual residence be applied despite renting rooms in the newly acquired dwelling?

The DGT's ruling

To qualify for the exemption, the dwelling must be the taxpayer's habitual residence, which requires continuous residence for at least three years. In the event of partial reinvestment, such as the renting of rooms, only the proportional part of the capital gain corresponding to the amount effectively invested in the part of the dwelling used privately by the taxpayer, including common areas, shall be excluded from taxation. Income from the renting of rooms is considered income from real estate capital.

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