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V1939-20 15 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption denied if new property was acquired more than two years before the sale of the old one

A taxpayer purchased a property in 2016 using a loan and sold their primary residence in 2019, intending to use the proceeds to repay the loan. The DGT ruled that the exemption does not apply because the purchase took place outside the two-year window relative to the sale.

The question raised

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

The DGT's ruling

For the exemption to apply, the reinvestment must be carried out within a period not exceeding two years from the transfer. Although money is fungible and the purchase is permitted to precede the sale, the regulations require that the amount be invested within a two-year period, whether prior to or subsequent to the sale. In this case, as the dwelling was acquired in 2016 and the previous one was sold in 2019, the temporal requirement is not met.

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