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V0644-23 17 March 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for primary residence requires necessary, non-voluntary change of address

A member of the military has enquired whether the exemption for reinvestment in a primary residence applies when selling a home after less than three years due to a job promotion and to improve family living conditions. The Directorate-General for Traffic (DGT) indicates that a job transfer may constitute an exceptional cause; however, seeking more suitable housing for remote work or proximity to schools is not considered a circumstance that necessitates a change of residence.

The question raised

Question posed: Possibility of applying the exemption for reinvestment in primary residence for Personal Income Tax purposes.

The DGT's ruling

For a residence to be considered primary without having resided there for three years, circumstances that necessarily require a change of domicile, such as a job transfer, must occur. The change must be an obligation and not an option based on the convenience or will of the taxpayer. Reasons such as the need for more suitable housing for teleworking or proximity to educational centers are not considered analogous circumstances that necessarily require a change of residence.

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