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V1736-24 15 July 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for principal residence may apply following the death of the taxpayer

A taxpayer inquired whether she and her deceased spouse could apply the principal residence reinvestment exemption after selling their home and purchasing a new one following his death. The Directorate General for Taxes (DGT) ruled that the death of the taxpayer does not constitute a failure to meet the reinvestment requirement.

The question raised

If the reinvestment requirement is understood to be met by both the deceased spouse and the petitioner, for the purposes of applying the reinvestment exemption established in Article 38 of the Personal Income Tax Law (LIRPF).

The DGT's ruling

The death of a natural person cannot be considered a failure to comply with the reinvestment requirements, due to the extinction of their legal personality and the cessation of the obligation to perform future actions. Therefore, the reinvestment exemption is applicable to both the deceased taxpayer and the survivor. For the exemption, the reinvested amount is the acquisition value of the new residence within the two years preceding or following the transfer, regardless of whether the proceeds from the sale, own funds, or loans are used.

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