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V2480-19 17 September 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Proportional exemption of capital gains applies only if the full amount obtained is not reinvested

The taxpayer asks whether they can apply the exemption for reinvesting proceeds from the sale of their primary residence and what amount would be exempt. The DGT rules that, if the total amount obtained is not reinvested, only the proportional part of the gain corresponding to the amount actually reinvested will be exempt from tax.

The question raised

Whether the exemption for reinvestment of the capital gain obtained from the sale of one's primary residence may be applied, and specifically, which amount would be exempt from taxation.

The DGT's ruling

In order for the gain to be exempt, the total amount obtained from the transfer (minus any outstanding loan principal, if applicable) must be reinvested in the acquisition of a new primary residence. The reinvestment must take place within a period of two years prior to or following the disposal. If the reinvested amount is less than the total amount obtained, only the proportional part of the capital gain corresponding to the amount invested shall be excluded.

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