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V0936-23 20 April 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

The reinvestment exemption cannot be applied if the sold property was not the primary residence during the two years prior to the sale

A married couple inquired whether they could apply the reinvestment exemption after selling their former primary residence to pay off the mortgage on a new one. The DGT responds that this is not possible because the sold property did not meet the requirement of being a primary residence at the time of transfer nor in the two preceding years.

The question raised

Whether it is possible to apply the reinvestment exemption for a primary residence in this case.

The DGT's ruling

For the exemption, the transferred property must be the primary residence at the time of sale or have been so on any day during the two years prior. In this case, the property ceased to be a residence in July 2019 and was sold in March 2022, therefore the two-year period is not met. The circumstances requiring a change of domicile only serve to qualify a property as a primary residence if one has not resided in it for three continuous years.

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