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V1410-26 5 June 2026 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for homes under construction: works must be completed within four years

A taxpayer has enquired whether they can apply the exemption for reinvesting capital gains from their primary residence into the construction of a new home. The Directorate-General for Taxes (DGT) clarifies that the two-year reinvestment period must be observed and that construction must be completed within a maximum of four years from the start of the investment.

The question raised

Requirements and deadlines for applying the exemption for reinvestment to the capital gain generated in the sale in a new construction scenario such as yours.

The DGT's ruling

To apply the exemption for housing construction, two conditions must be met: 1) reinvesting the amount within a period of two years (before or after) the sale of the previous residence, and 2) that the work is completed within a period not exceeding four years from the start of the investment. This four-year period may be extended in cases of the developer's insolvency or exceptional circumstances not attributable to the taxpayer. The construction period is calculated from the first payment made for the construction that is considered a reinvested amount.

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