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V2329-19 10 September 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption cannot be applied if the sold property ceased to be a primary residence more than two years ago

The taxpayer asks whether they can apply the primary residence reinvestment exemption by using the proceeds from the sale of an old house to pay off the mortgage on their current home. The Directorate General for Taxes (DGT) rules that this is not possible because the sold property ceased to be their primary residence in 2007, exceeding the required two-year period.

The question raised

Whether it is possible to benefit from the exemption for reinvestment in a primary residence.

The DGT's ruling

To apply the exemption, the transferred property must be the primary residence at the time of sale or have been so on any day during the two years prior to the transfer. In this case, the property ceased to be the primary residence in 2007 due to divorce, thus the temporal requirement for the sale in 2019 is not met. Therefore, the exemption for reinvestment on the capital gain obtained is not applicable.

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