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V2832-20 22 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption may apply if a loft is converted and used as a primary residence

The taxpayer inquired whether the reinvestment exemption could be applied after selling their home to purchase a loft lacking a certificate of occupancy. The Directorate General for Taxes (DGT) ruled that if the premises are converted into a dwelling and used as a primary residence, it may qualify for the exemption.

The question raised

Possibility of considering the loft as a habitual residence, and allowing for the application of the exemption for reinvestment in a habitual residence.

The DGT's ruling

The concept of habitual residence includes any building, even if it does not comply with urban planning regulations or lacks the required classification. For a commercial premises or loft to be considered a habitual residence, it must be adapted or capable of being adapted as a dwelling, fulfilling the requirements of ownership, effective residence, and permanence. The accreditation that the premises constitute the habitual residence is a matter of fact that must be proven by the taxpayer.

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