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V1226-17 18 May 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · vivienda habitual

Reinvestment exemption for primary residence requires mandatory change of domicile

A taxpayer asks whether living in a civil partnership and the need for a larger home allow for the exemption of capital gains through reinvestment, without having met the three-year residency requirement. The DGT responds that a civil partnership is not equivalent to marriage and that the need for a larger home is, in principle, a matter of personal choice.

The question raised

Whether their situation could be assimilated to the fact set forth in the LIRPF regarding the exceptions to the 3-year period for the habitual residence, such as the case of entering into marriage, given that the consultant and her partner are not married but are a domestic partnership, and live in the dwelling purchased jointly. The question is whether it would be possible to justify said situation with documentation, and whether the exemption for the capital gain obtained from the sale of the previous dwelling could be admitted, since the total amount of the sale was reinvested in the purchase of the subsequent dwelling.

The DGT's ruling

To exempt the three-year habitual residence period, the change of residence must be a circumstance that necessarily requires it, leaving no margin of choice for the taxpayer. The regulations do not allow for the equivalence of a domestic partnership with marriage or matrimonial separation. Likewise, the need for a larger dwelling due to changes in family composition does not necessarily imply the obligation to change residence. If the taxpayer considers their situation to be a necessity, they must prove it to the Administration through the means of proof admitted under Law.

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