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V2727-23 6 October 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption for housing under construction requires completion within four years

The applicant asks whether the reinvestment exemption can be applied to housing under construction if the deed is not formalised within two years. The DGT rules that two conditions must be met: the amount must be reinvested within two years, and construction must be completed within the four-year period established by the Regulations.

The question raised

Question posed: If, due to causes attributable to the selling party, the purchase and sale deed is not formalized before April 4, 2024, the moment when 2 years have elapsed since the transfer of the previous primary residence, and taking into account that the taxpayer would be willing to pay the full price of the new dwelling before that date, whether the application of the exemption for reinvestment in the primary residence would be possible even if the delivery of the dwelling had not been carried out within the established reinvestment period.

The DGT's ruling

To apply the exemption for the construction of a dwelling, a dual condition must be met: 1) applying the entire amount of the sale proceeds to the construction within a period of two years from the transfer of the previous dwelling. 2) that the construction is completed within a period not exceeding four years from the commencement of the investment, except for extensions due to exceptional circumstances or the insolvency of the developer. Likewise, the acquisition of up to two garage spaces and storage rooms is assimilated to the dwelling if they are acquired in the same act and are located within the same real estate complex.

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