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V1918-19 22 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 a primary residence in the two preceding years

A taxpayer inquired whether they could apply for the reinvestment exemption after selling an old property to purchase a new one following a divorce. The Directorate General of Taxes (DGT) ruled that this is not possible because the property sold was neither the taxpayer's primary residence at the time of sale nor during the two years prior.

The question raised

Whether it is possible to avail of the exemption for reinvestment in a habitual residence.

The DGT's ruling

To apply the exemption, the transferred property must be the taxpayer's habitual residence at the time of the sale or have been so on any day during the two preceding years. In this case, the sold property had ceased to be the habitual residence several years prior to the transfer, therefore the legal requirement is not met. The exemption only applies to cases involving the transfer of a habitual residence.

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