Skip to content
Back to index
V2341-17 15 September 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Reinvestment exemption cannot be applied if the sold property was not the main residence in the previous two years

The taxpayer asks whether they can apply the reinvestment exemption by selling a property in the United Kingdom and purchasing one in Spain. The Directorate General for Tax (DGT) rules that, to qualify, the sold property must be the main residence at the time of sale or must have been the main residence on any day during the preceding two years.

The question raised

Whether it would be possible to avail oneself of the exemption for reinvestment in a habitual residence.

The DGT's ruling

For the gain from the sale of a dwelling to be exempt, it must be the habitual residence at the time of the transfer or have been so in the two preceding years. If the dwelling ceased to be the habitual residence more than two years ago, the exemption cannot be applied even if one returns to reside in it, as a continuous period of at least three years is required. In the second scenario presented, the exemption will only be possible if the requirements of habitual residence and reinvestment are met within the legal timeframes.

Book your free first meeting