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V2057-24 25 September 2024 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption denied if full ownership of the property has not been held for three years

A taxpayer inquired whether they could apply the reinvestment exemption for their primary residence after selling the bare ownership of their home and acquiring full ownership of a new one. The Directorate General for Taxes (DGT) ruled that this is not possible, as for a property to qualify as a primary residence, full ownership must have been held for at least three continuous years.

The question raised

Possibility of applying the reinvestment exemption on the primary residence for the purposes of Personal Income Tax.

The DGT's ruling

For a dwelling to be considered a primary residence for the purposes of the reinvestment exemption, it must have effectively constituted the taxpayer's residence for a minimum period of three continuous years from its acquisition. This three-year calculation requires that the taxpayer has held full ownership of the dwelling during said period. Therefore, the period of residence prior to the acquisition of full ownership cannot be included in the calculation.

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