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V1516-24 20 June 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 completion within four years

A taxpayer inquired about the amount considered reinvested when purchasing a home under construction after selling their primary residence. The DGT ruled that the two-year reinvestment period must be met and that construction works must be completed within a maximum of four years from the start of the investment.

The question raised

Amount that would be considered reinvested for the purposes of the exemption for reinvestment in a primary residence in the case of construction.

The DGT's ruling

To apply the exemption for the construction of a new dwelling, two conditions must be met: 1) applying the total amount obtained from the sale to the construction within a period of two years (prior or subsequent to the transfer). 2) that the works are completed within a period not exceeding four years from the start of the investment, except for extensions due to exceptional circumstances. If payments are made outside the two-year period, they will not be considered a reinvested amount and the exemption will be partial.

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