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V2156-20 26 June 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption applicable if new home is purchased up to two years before selling the previous one

A taxpayer inquired whether the exemption for reinvestment in a primary residence can be applied if the new property is purchased before the sale of the current one. The Directorate-General for Taxes (DGT) ruled that this is possible, provided the purchase occurs within the two-year period preceding the transfer of the old property.

The question raised

Period for carrying out the transfer of the dwelling in the event of previously acquiring the new dwelling and being able to apply the reinvestment exemption.

The DGT's ruling

To apply the exemption, it is necessary to invest an amount equivalent to the amount obtained from the transfer within a period of two years, whether prior to or subsequent to the sale. It is not necessary for the funds to be the same, given the fungible nature of money. The exemption shall cover both the portion of the amount intended to amortize the loan and the portion that replenishes the savings invested in the previous acquisition.

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