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V1242-23 11 May 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for primary residence may apply if construction and reinvestment deadlines are met

The applicant inquires about the timeframe for the primary residence reinvestment exemption and whether payments made prior to the sale of the previous property qualify as reinvestment. The DGT rules that reinvestment must occur within a two-year window (either before or after the sale) and that construction must be completed within the statutory four-year period.

The question raised

Question posed: The taxpayer requests to know, for the purposes of applying the exemption for reinvestment in the primary residence, the period available to transfer the former primary residence and whether amounts paid prior to the date of the sale and purchase deed are considered reinvested amounts.

The DGT's ruling

To qualify for the exemption for reinvestment in the construction of housing, two conditions must be met: 1) applying the amount obtained from the sale to the new housing within a period of two years (either before or after the transfer). 2) that the construction is completed within a period not exceeding four years from the start of the investment. It is not necessary for the funds to be the same, allowing amounts invested before the sale to count as reinvestment if they were made within the two years prior to the transfer.

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