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V1669-17 29 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Sale of commercial premises does not qualify for reinvestment exemption for a second home

A 69-year-old taxpayer inquired whether capital gains from the sale of commercial premises could be exempt if the proceeds are reinvested in a second home. The Directorate General for Taxes (DGT) ruled that the gain will be subject to taxation, as reinvestment in residential property does not constitute a valid exemption in this instance.

The question raised

Question posed: Determination and taxation of the capital gain, and whether it may be exempt through reinvestment in a second residence.

The DGT's ruling

The transfer of a commercial premises generates a capital gain that must be calculated by subtracting the acquisition value (reduced by depreciation) from the transfer value. The reinvestment exemption for persons over 65 years of age only applies if the amount is used to establish an insured life annuity, not for the acquisition of a second residence. Therefore, the gain from the sale of the premises would be subject to taxation.

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