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V0898-19 24 April 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Two-year deadline for main residence reinvestment exemption cannot be extended

A taxpayer inquired whether the two-year period for reinvesting proceeds from the sale of their main residence could be extended due to delays in the delivery of their new home. The Directorate-General for Traffic (DGT) responded that the deadline is strictly two years and there is no regulation allowing for an extension.

The question raised

Possibility of extending the period for reinvestment and allowing the capital gain generated in the transfer of the primary residence to be exempt from taxation. Tax effects if the acquisition is not made within the two-year period. Whether, subsequently, when the dwelling is acquired, the exemption may be applied.

The DGT's ruling

The acquisition of the new dwelling must take place within the two years following the transfer of the primary residence. There is no regulation that allows for the extension of this period due to causes beyond the taxpayer's control. If the acquisition is not made within the period, the right to the exemption is lost and the tax situation must be regularized. An acquisition made after the deadline does not allow for the application of the exemption nor the recovery of the amount paid.

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