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V1926-22 12 September 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

For the exemption due to reinvestment in construction, the work must be completed within a period of four years

The consultant asks whether she can apply the exemption for reinvestment in a primary residence when selling her house to build a new one on a plot of land. The DGT responds that two conditions must be met: reinvesting the amount within a period of two years and ensuring that the construction is completed within the four-year period established in the Regulations.

The question raised

Question posed: Possibility of applying the exemption for reinvestment in a primary residence for Personal Income Tax (IRPF) purposes.

The DGT's ruling

To apply the exemption for the construction of a dwelling, a dual condition must be met. First, the entirety of the amount obtained from the sale must be applied to the construction of the new dwelling within a period of two years (either before or after the transfer). Second, the construction must be completed within a period not exceeding four years from the start of the investment, except for extensions due to exceptional circumstances or the developer's insolvency. Construction is assimilated to acquisition provided that these time limits are met.

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