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V0556-24 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 applies if new home is occupied within two years of sale

A married couple inquired whether they could claim the reinvestment exemption after selling their primary residence and purchasing another, even if they do not move into the new property until 14 months later. The Directorate General for Taxes (DGT) ruled that the exemption is applicable provided the new property becomes the primary residence within the two-year period following the sale.

The question raised

Whether, if applicable in their case, the exemption for reinvestment in a habitual dwelling applies to the capital gain generated from the sale.

The DGT's ruling

For the exemption, the new dwelling must be effectively and permanently inhabited within a period of twelve months from its acquisition, except in justified circumstances. Notwithstanding, the dwelling shall be considered habitual if residence is established therein within the period of two years following the transfer of the previous dwelling. The three-year continuous residence period for the new dwelling shall begin to accrue from the effective relocation and not from the date of acquisition.

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