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V1878-23 28 June 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

The reinvestment exemption cannot be applied if the sold property has not been the primary residence

A taxpayer sells a property that was being rented out to pay off the mortgage on their new primary residence. The DGT rules that the reinvestment exemption cannot be claimed because the transferred property did not meet the requirement of being a primary residence.

The question raised

Whether the reinvestment exemption for a primary residence is applicable.

The DGT's ruling

To apply the reinvestment exemption, the transferred property must be the taxpayer's primary residence. According to the RIRPF, a primary residence is that which constitutes their residence for a continuous period of at least three years, except in exceptional circumstances. Since the sold property never became the applicant's primary residence, the exemption under Article 38.1 of the LIRPF does not apply.

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