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V1754-19 10 July 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for primary residence requires proof of residency and can apply up to two years after moving out

The inquirer asks whether the primary residence reinvestment exemption can be applied if they are not registered at the address, whether the sale must occur before a divorce, or if there is a deadline after leaving the property. The DGT rules that municipal registration alone is insufficient proof of residency and that the sale may take place up to two years after vacating the home.

The question raised

Whether the capital gain that might be obtained in the sale would be exempt, whether it is necessary to be registered in the municipal register at the residence for it to be considered habitual, whether it is necessary for the sale to take place before the divorce, and the deadline for the sale in the event that the inquirer abandons the residence.

The DGT's ruling

For the exemption, both the transferred and the acquired property must be the habitual residence, understood as such to be the continuous residence of at least three years or that which has been held until two years prior to the transfer. If the residence is abandoned, the sale may be carried out within the following two years to maintain the possibility of the exemption, regardless of whether a divorce has occurred. Registration in the municipal register or the tax domicile are not sufficient evidence on their own to prove the habitual residence, which must be proven by any means of evidence admitted in Law.

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