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V1555-18 6 June 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Reinvestment exemption for primary residence may apply if sale proceeds are used for a new home

The inquirer asks about the acquisition date and the application of the reinvestment exemption following an increase in property ownership. The DGT clarifies that capital gains will be determined based on the date and value of each portion of ownership, and that the exemption requires reinvesting the proceeds into a new primary residence.

The question raised

Date of acquisition of the residence, and whether the exemption for reinvestment of the capital gain obtained from the transfer of the residence is applicable.

The DGT's ruling

In order for the gain from the sale of the primary residence to be exempt, the total amount obtained must be reinvested in the acquisition or renovation of a new primary residence within a period of two years (prior to or following the sale). The residence must have been the primary residence for three years or meet the exceptions for effective occupation within twelve months. If the reinvestment is not carried out in the same year, the intention to do so must be declared in the corresponding tax return.

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