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V1588-22 30 June 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Reinvestment exemption for primary residence may apply to property swaps if both properties are primary residences

The applicant inquired whether the primary residence reinvestment exemption could be applied after swapping their share of a property for another. The Directorate General for Taxes (DGT) ruled that this is possible provided both properties meet the requirements for a primary residence and the proceeds are reinvested, even if through a payment in kind.

The question raised

Possibility of applying the exemption for reinvestment in a primary residence under the Personal Income Tax.

The DGT's ruling

For the capital gain from the transfer of the primary residence to be exempt, it is necessary to reinvest the total amount obtained in the acquisition or rehabilitation of a new primary residence within a period of two years (prior to or following the disposal). In the case of exchanges, the exemption applies if the transferred residence and the acquired residence are primary residences, with the amount obtained upon receiving a payment in kind being considered reinvested.

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