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V0721-23 24 March 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption does not apply if the transferred property is not legally owned by the taxpayer

A taxpayer inquired whether the exemption for reinvesting in a primary residence could be applied if the property being sold is owned by their partner (despite both parties contributing to the mortgage) and the new property is owned solely by the taxpayer. The Directorate General for Tax (DGT) ruled that this is not possible, as the exemption requires the taxpayer to be the legal owner of the transferred asset.

The question raised

Referred to in the description of facts.

The DGT's ruling

The exemption for reinvestment in a primary residence requires that the capital gain arises from the transfer of the taxpayer's own primary residence. According to the rules of legal ownership, gains and losses are attributed to those who are the owners of the assets from which they originate. Therefore, if the transferred residence belongs exclusively to the partner, the exemption is not applicable to the applicant, regardless of who is the holder of the mortgage loan.

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