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V2694-20 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

A taxpayer purchased a new primary residence using external financing and plans to sell their current home in one year. The Tax Agency clarifies that the exemption applies as long as the proceeds are reinvested within a two-year period, whether before or after the sale.

The question raised

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

The DGT's ruling

The exemption is applicable if the new dwelling was acquired within the two-year period prior to the transfer of the old one. It is not necessary that the funds obtained from the sale are the same as those used for the purchase, due to the fungible nature of money. The exemption shall cover both the portion of the amount intended to amortize the loan for the new dwelling and the portion that replenishes the previously invested savings.

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