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V1540-17 16 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · deducción por inversión en vivienda habitual

Reinvestment exemption for primary residence applicable if both properties meet residency requirements

The taxpayer asks whether they can apply the investment deduction or the reinvestment exemption after selling a property owned since 1996 and using the proceeds to pay off the mortgage on a new property acquired in 2015. The DGT rules that the investment deduction does not apply as the property was acquired after 2013, but the reinvestment exemption is applicable provided the primary residence requirements are met.

The question raised

Whether the deduction for investment in primary residence or the exemption for reinvestment of capital gains is applicable to the capital gain arising from the sale of the property.

The DGT's ruling

The deduction for investment in primary residence is not applicable because the property was acquired in 2015, falling outside the transitional regime which requires acquisition prior to 2013. However, the exemption for reinvestment of capital gains is applicable if both the transferred and the acquired property qualify as a primary residence according to the RIRPF. To this end, the acquired property must have served as a residence for at least three years or meet the exceptions for change of domicile.

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