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V1667-23 13 June 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for main residence may apply when acquiring the remaining ownership share of a property

A taxpayer inquired whether the exemption for reinvestment in a main residence could be applied when selling their current home to financially compensate siblings in order to acquire full ownership of a property inherited from their parents. The Directorate-General for Tax (DGT) ruled that the capital gain would be exempt if the proceeds are reinvested in acquiring the remaining ownership share of the new main residence.

The question raised

Possibility of applying the exemption for reinvestment in the habitual residence for the purposes of Personal Income Tax.

The DGT's ruling

To qualify for the exemption, the transferred dwelling and the acquired dwelling must be habitual residences according to the residency requirements of the Regulation. The capital gain shall be exempt if the amount obtained is reinvested in the acquisition of the remaining ownership share of the new habitual residence. Said dwelling may have the character of community property even if the part acquired by inheritance is separate property.

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