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V2759-23 10 October 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption cannot be applied if the sold property has not been the main residence for three years

A taxpayer asks whether they can apply the reinvestment exemption after selling a property in which they had returned to reside following a period abroad. The Directorate General for Taxes (DGT) rules that this is not possible because the property does not meet the requirement of being the main residence.

The question raised

Whether the exemption for reinvestment may be applied to the capital gain arising from the transfer of the property.

The DGT's ruling

To apply the exemption, the transferred property must be the habitual residence, defined as the effective and permanent residence for a continuous period of at least three years. If the property loses this status upon relocating the residence, to recover it, one must reside in it again for three continuous years. In this case, as one has not resided there for three years since their return, the property is not habitual nor was it so in the two years prior to the sale.

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