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V1586-20 26 May 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption cannot be applied if the property ceased to be a primary residence more than two years ago

The applicant asks whether they can apply the reinvestment exemption after selling a property that served as their primary residence until 2013. The Directorate General for Taxes (DGT) rules that this is not possible because the sale took place in 2020, exceeding the two-year limit since the property ceased to be a primary residence.

The question raised

Whether the exemption for reinvestment in a habitual residence is applicable.

The DGT's ruling

To apply the exemption, the transferred property must be the habitual residence at the time of sale or have been so on any day during the two years prior to the transfer. If the property ceases to be a habitual residence, the taxpayer has a period of two years for its sale without losing the right to the exemption. As more than two years have elapsed since the property ceased to be a habitual residence, the legal requirement is not met.

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