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V3145-20 20 October 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Two-year deadline for reinvestment in primary residence suspended due to COVID-19 state of alarm

A taxpayer inquired whether a delay in the delivery of a property under construction, caused by the COVID-19 state of alarm, allows for an extension of the two-year period required for the reinvestment exemption. The Directorate-General for Taxes (DGT) ruled that the calculation of this period was suspended between 14 March and 30 May 2020.

The question raised

Possible extension of the two-year reinvestment period referred to in Article 38 of the LIRPF, due to delivery delays resulting from the state of alarm declared following the COVID-19 epidemic.

The DGT's ruling

The two-year period for reinvestment is suspended from the entry into force of Royal Decree 463/2020 (March 14, 2020) until May 30, 2020. Regarding the exemption for dwellings under construction, legal acquisition occurs upon the delivery of the sold item. The delivery must take place within the two-year period, calculated including the aforementioned suspension, to avoid the taxation of the capital gain.

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