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V0785-22 11 April 2022 · 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 purchased before selling the old one

A taxpayer purchased a new home using a mortgage before selling their primary residence. The Tax Agency has ruled that the exemption applies provided the proceeds from the sale are reinvested into the new home, even if the purchase preceded the sale.

The question raised

Whether the exemption for reinvestment is applicable, and for this purpose, what is understood by the reinvested amount.

The DGT's ruling

The exemption requires that both the transferred and the acquired dwelling be the habitual residence. The reinvestment may be carried out within a period of two years prior to or following the transfer. The reinvested amount is the total acquisition value of the new dwelling (in the portion corresponding to the taxpayer), regardless of whether it is financed with own funds or with a mortgage loan.

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