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V0945-24 30 April 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for homes under construction requires compliance with two-year reinvestment and four-year completion deadlines

The taxpayer inquires about applying the exemption for reinvesting capital gains from their primary residence when paying for the construction of a new home in instalments. The DGT clarifies that both the two-year reinvestment period and the construction completion deadlines established in the Regulations must be met.

The question raised

Amount considered reinvested in relation to the application of the exemption for reinvestment in a primary residence.

The DGT's ruling

To apply the exemption for the construction of a dwelling, a dual condition must be met: 1) applying the entirety of the amount obtained to the construction within a period of two years from the sale of the previous dwelling. 2) that the construction is completed within a period not exceeding four years from the commencement of the investment, except for extensions due to exceptional circumstances or the insolvency of the developer. Payments made outside the two-year reinvestment period shall not be considered a reinvested amount.

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