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V2618-23 27 September 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Renovation works may qualify as reinvestment if focused on structural elements and within time limits

Consultants inquired whether renovation works on a historic property could be counted as a reinvested amount for the principal residence exemption, and whether the two-year period could be extended. The DGT ruled that only structural consolidation works qualify as renovation and that payments must be made within the two-year period.

The question raised

1st. Whether, for the purposes of applying the exemption for reinvestment in the primary residence, the applicants may consider as a reinvested amount the sums paid for the rehabilitation of the property. If so, whether it would be possible to extend the 2-year reinvestment period established by the regulations.

The DGT's ruling

For rehabilitation to count as reinvestment, the works must have as their primary objective reconstruction through the consolidation of structures, facades, or roofs, excluding adaptation or modernization reforms. Furthermore, the cost must exceed 25% of the building's value. Only amounts paid within the two years following the transfer of the previous residence are considered reinvested amounts.

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