Skip to content
Back to index
V2944-20 30 September 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Compensation for lease termination taxed as capital gains; no exemption for reinvestment available

A tenant inquired whether compensation received for vacating an old-regime rental property could be exempt from tax if the funds are reinvested in a primary residence. The Directorate General for Taxes (DGT) ruled that the amount constitutes a capital gain and that the reinvestment exemption does not apply, as the inquirer is not the owner of the leased property.

The question raised

Taxation of the compensation received and whether the exemption for reinvestment in the primary residence is applicable.

The DGT's ruling

The compensation for the waiver of leasehold rights constitutes a capital gain pursuant to Article 33.1 of the Personal Income Tax Law (LIRPF). The amount of said gain shall be the sum received due to the termination of the contract. The exemption for reinvestment in the primary residence under Article 38.1 of the LIRPF is not applicable, as this requires being the owner of both the transferred and the acquired property.

Book your free first meeting