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V2535-20 24 July 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · vivienda habitual

Reinvestment exemption requires relocation to be a mandatory necessity rather than an option

A married couple inquired whether the sale of their home, purchased less than three years ago due to financial constraints, allows for the application of the primary residence reinvestment exemption. The DGT ruled that for a property to be considered a primary residence before the three-year mark, the change of address must be an unavoidable necessity rather than a matter of mere convenience.

The question raised

Given the circumstances involved, whether upon selling the dwelling, before three years have passed since its acquisition, it may be considered to have attained the status of a primary residence for the purposes of the exemption for reinvestment in a primary residence.

The DGT's ruling

For a dwelling to be considered a primary residence without three years having elapsed, circumstances must concur that necessarily require a change of domicile. The term 'necessarily' implies an indispensable obligation or necessity that forces the execution of the change, as opposed to a voluntary one. Insufficient resources or the search for new employment may be considered analogous circumstances, but their assessment as 'necessary' depends on the evidence provided by the taxpayer to the Administration.

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