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V0771-25 5 May 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption not applicable if sold property was not habitual residence

A taxpayer asks whether the reinvestment exemption applies after selling a property that was their habitual residence until 2020 and reinvesting in a new home. The DGT responds that the exemption does not apply because the property sold was not their habitual residence at the time of sale or in the two years prior.

The question raised

Question posed: Possibility of applying the reinvestment exemption for the sale of a former residence under Personal Income Tax.

The DGT's ruling

The exemption for reinvestment requires that both the transferred property and the acquired property be the taxpayer's habitual residence. For the transferred property to be considered habitual, it must have been a continuous residence for at least three years or have been so until two years prior to the transfer. In this case, as residence in the property ceased in 2020, the requirement of habitual residence is not met at the time of sale nor in the preceding two-year period.

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