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V1972-22 16 September 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption requires three years of residence and full ownership, except in exceptional circumstances

A taxpayer asks whether they can apply for the reinvestment exemption for their main residence after exercising a call option. The DGT rules that for a property to be considered a main residence, the taxpayer must have held full ownership for at least three continuous years.

The question raised

Possibility of applying the reinvestment exemption for the primary residence for Personal Income Tax (IRPF) purposes.

The DGT's ruling

For the exemption, the property must be the effective residence for a minimum period of three continuous years from the acquisition of full ownership. This period may only be excepted if circumstances arise that necessarily require a change of residence, which must be proven before the Administration. If the transfer occurs before completing three years of ownership, it is not considered a primary residence unless such indispensable necessity is justified.

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