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V3244-19 27 November 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption applicable if new home was purchased up to two years before selling the old one

A taxpayer purchased a new home using savings and, two years later, sold their previous primary residence. The Tax Agency clarifies that the exemption applies provided the proceeds from the sale are reinvested to replenish the savings used for the initial purchase.

The question raised

Whether the reinvestment exemption for a primary residence is applicable.

The DGT's ruling

The reinvestment exemption allows for the new dwelling to have been acquired within the two-year period prior to the transfer of the old one. It is not necessary for the sale proceeds to be the same funds used for the purchase, due to the fungible nature of money. It is required that the amount obtained from the sale serves to replace the savings invested in the new primary residence. The exemption shall be proportional to the amount obtained from the transfer that corresponds to the replacement of said savings.

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