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V2692-20 2 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption applicable if new home was purchased up to two years before selling the old one

The taxpayer purchased a primary residence in January 2020 and sold their previous home in August 2020. The Tax Agency confirms the exemption applies because reinvestment can take place within a two-year period, whether before or after the transfer.

The question raised

Whether the exemption for reinvestment applies to the capital gain obtained from the sale of the habitual residence.

The DGT's ruling

The exemption requires that both the transferred and the acquired dwelling be habitual residences and that the amount obtained be reinvested within a period of two years, calculated from date to date. Due to the fungible nature of money, reinvestment may occur prior to the sale, allowing the amount obtained from the transfer to serve to replace savings previously invested in the new dwelling or to amortize its mortgage loan. The reality of the transfer and acquisition, the status of both properties as habitual residences, and that the amount obtained has served to finance the new dwelling or its debt must be proven.

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