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V1755-19 10 July 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption cannot be applied if the sold property was not the main residence in the two years prior to sale

A taxpayer inquired whether they could apply the reinvestment exemption when selling a property and using the proceeds to repay a family loan for their new main residence. The Directorate General for Taxes (DGT) ruled that this is not possible because the sold property had ceased to be the main residence more than two years before the transfer.

The question raised

Whether the exemption for reinvestment in a primary residence is applicable.

The DGT's ruling

To apply the exemption, the transferred property must be the primary residence at the time of sale or have been so on any day during the two preceding years. In this case, the property ceased to be the primary residence in January 2015 and was sold in July 2018, therefore the temporal requirement is not met. Consequently, the exemption for reinvestment is not applicable.

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