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V1633-25 15 September 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption not applicable if property sold was not habitual residence in prior two years

The consultant asks whether the sale of a Madrid property can benefit from the reinvestment exemption to service a loan on another property. The DGT responds that this is not possible because the property was not the habitual residence at the time of sale or in the two years preceding it.

The question raised

Whether your residence in Madrid can be considered habitual for the purposes of the reinvestment exemption under Article 38 of the Personal Income Tax Law.

The DGT's ruling

To apply the reinvestment exemption, the transferred property must be the habitual residence at the time of the transfer or have been so on any day during the two preceding years. Habitual residence requires continuous residence for at least three years, except in exceptional circumstances such as job transfers. In this case, as the property has not been resided in since 2017, it does not meet the requirement of habitual residence.

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