Skip to content
Back to index
V2272-20 3 July 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · vivienda habitual

Job loss does not necessarily mandate a change of residence to qualify for the primary residence exemption

A taxpayer inquired whether job loss and the subsequent lack of financial resources to meet mortgage payments constitute circumstances that necessitate a change of residence to maintain the exemption for reinvestment in a primary residence. The Directorate General of Taxes (DGT) stated that losing one's job does not, in itself, require a change of residence or the sale of the property.

The question raised

Consideration of dismissal associated with the loss and insufficiency of economic resources as a necessary circumstance that requires a change of domicile, while maintaining the right to claim the exemption for reinvestment in the habitual dwelling.

The DGT's ruling

For a dwelling to be considered habitual without fulfilling three years of residence, the circumstance must necessarily require a change of domicile, which implies an obligation that the taxpayer cannot avoid. The loss of employment and economic resources does not implicitly entail the requirement to change domicile, being initially considered a free decision of the taxpayer. The assessment of whether the specific situation compels a change of residence is a matter of fact that must be determined by the management and inspection bodies through the evidence provided.

Book your free first meeting