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V0892-24 23 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for principal residence may apply even if the mortgage has been previously repaid

The inquirer asks whether the reinvestment exemption can be applied when selling their principal residence (allocated following the dissolution of a community property regime) and whether the amount to be reinvested is reduced because the mortgage was settled prior to the sale. The DGT rules that the amount to be reinvested shall be the full transfer value, as there is no outstanding loan to be amortised.

The question raised

Whether the reinvestment exemption is applicable and, if so, whether for the purposes of determining the amount to be reinvested, it would be reduced by the cancellation of the mortgage.

The DGT's ruling

For the reinvestment exemption, the total amount obtained is the transfer value reduced by the expenses inherent to the transfer. If third-party financing exists, the transfer value must be reduced by the principal of the loan outstanding at the time of the transfer. As the mortgage was previously cancelled, the amount to be reinvested is the transfer value without said reduction.

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