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V1334-24 7 June 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Sale of inherited property does not qualify for reinvestment exemption if it is not the primary residence

A taxpayer married under community property regime asks whether they can apply the reinvestment exemption to their primary residence mortgage after selling a property received through inheritance. The DGT rules that the capital gain belongs entirely to the inheriting spouse and that the exemption does not apply because the inherited property was not their primary residence.

The question raised

Tax treatment of said sale in the Personal Income Tax.

The DGT's ruling

The capital gain or loss from the sale of an inherited real estate property is attributed entirely to the spouse who holds title to the asset, as it is separate property. The acquisition value shall be that resulting from the Inheritance and Gift Tax regulations. The exemption for reinvestment in the primary residence under Article 38 of the Personal Income Tax Law is not applicable, as the transferred property does not constitute the taxpayer's primary residence. The reduction of the mortgage on the primary residence could give rise to a deduction, but not to the reinvestment exemption.

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