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V2042-24 23 September 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Value of a new home may be considered reinvested even if financed by a mortgage loan

A taxpayer has enquired about the amount to be considered reinvested for the capital gains tax exemption on the sale of a primary residence when the new home is partially financed through a mortgage loan. The Directorate General for Taxes (DGT) has ruled that the reinvested amount is the acquisition value of the new property, regardless of whether it is funded by personal savings or a loan.

The question raised

Taking into account that the acquisition has been partially financed through a mortgage loan, what would be the amount that the inquirer must consider as reinvested so that the capital gain obtained is exempt.

The DGT's ruling

For the exemption due to reinvestment in a primary residence, the reinvested amount is the acquisition value of the new dwelling to the extent that it corresponds to the percentage of ownership acquired. This amount is considered reinvested regardless of whether it is financed with own funds or through a mortgage loan. In the case of co-ownership, each spouse applies the exemption according to their share in the sale and the share acquired in the new dwelling.

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