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V0928-22 29 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 following COVID-19 deadline suspension and use of financing

The taxpayer asks whether the exemption for reinvestment in a primary residence can be applied if the new home is purchased before the old one is sold, and what amount is considered reinvested. The DGT rules that the suspension of deadlines due to COVID-19 allows the acquisition to be considered within the legal timeframe and that the reinvested amount is the total acquisition value of the new home.

The question raised

Whether, taking into account the declaration of the state of alarm decreed to address the crisis caused by COVID-19, the reinvestment exemption is applicable and, for its purposes, what is understood by the reinvested amount.

The DGT's ruling

Due to the suspension of deadlines caused by COVID-19, the calculation of the two-year period for reinvestment is suspended from March 14 to May 30, 2020. For the exemption, the reinvested amount is the total acquisition value of the new dwelling, regardless of whether it has been financed through a mortgage loan or equity. Both the transferred and the acquired dwelling must be primary residences.

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