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V2853-20 22 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 is acquired before selling the previous one

The applicant intends to build a new home through self-promotion and use the proceeds from the sale of their current home to pay off the new mortgage. The DGT rules that the exemption can be applied provided the two-year deadlines are met and the full amount obtained is reinvested.

The question raised

Whether the reinvestment exemption is applicable.

The DGT's ruling

For the exemption, the new dwelling must be legally acquired within the period of two years preceding or following the transfer of the old one. In self-construction, the acquisition is understood to have occurred upon the completion of the works. As money is a fungible asset, the exemption applies if the amount obtained from the sale is used to amortize the mortgage of the new dwelling or to replace the savings invested in its prior acquisition.

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