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V3261-17 21 December 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Selling a home within three years does not allow for reinvestment exemption if the move is not deemed necessary

A taxpayer inquired whether selling their home following marriage, due to space and work-life balance requirements, allows for a tax exemption through reinvestment in another primary residence. The Directorate General of Taxes (DGT) ruled that marriage alone does not justify the move and that a lack of space is not a circumstance that necessarily necessitates a change of residence.

The question raised

A. Method of taxation for the sale of the dwelling under Personal Income Tax (IRPF).

The DGT's ruling

For the transfer of a dwelling to be considered a primary residence and allow for the reinvestment exemption before completing three years of residence, the change of domicile must be a necessity and not an option for convenience. The celebration of marriage is not sufficient in itself if there is no necessary link to the change of residence. Likewise, a lack of space or reasons for work-life balance are not considered circumstances that necessarily require a change of domicile according to the regulations.

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