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V3010-20 6 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption cannot be applied if the property ceased to be a primary residence more than two years ago

A taxpayer inquired whether they could apply the reinvestment exemption for a new home after selling a property that was once their primary residence but in which they had recently moved back. The Directorate General for Taxes (DGT) ruled that, because more than two years had passed since it ceased to be their primary residence, the requirements for the exemption are not met.

The question raised

Whether it is possible to benefit from the exemption for reinvestment in housing, understanding that the property being transferred meets the criteria for a habitual residence, given that it constituted the habitual residence for five years, that the individual has resided in it again for a period of time, and that it is the only property owned.

The DGT's ruling

For the transfer to be considered a transfer of a habitual residence, the building must have been the residence for a continuous period of at least three years. Furthermore, the habitual residence is understood to be transferred if it constitutes the residence at that moment or would have been so on any day during the two years prior to the transfer. If more than two years have elapsed since it lost said status, the exemption is not applicable.

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