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V3567-20 16 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Self-assessment cannot be rectified to apply reinvestment exemption once general regime has been chosen

Taxpayers have enquired whether they can rectify their Personal Income Tax (IRPF) return to apply the reinvestment exemption for their main residence after having already paid tax on the capital gain. The Directorate General for Taxes (DGT) has ruled that, as the exemption represents a choice between two different tax regimes, it is not possible to switch from one to the other once the tax filing period has concluded.

The question raised

Whether the property sold can be considered a primary residence despite the taxpayer not having resided in it for three consecutive years, considering the concurrent circumstances, for the purposes of applying the reinvestment exemption, by rectifying the 2018 Personal Income Tax self-assessment.

The DGT's ruling

The exemption for reinvestment in a primary residence constitutes a choice between the general taxation regime and the special exemption regime. Pursuant to Article 119.3 of the General Tax Law, options that must be exercised through the filing of a tax return cannot be rectified after the regulatory period. Therefore, if the taxation of the gain was expressly chosen, it is not possible to rectify to switch to the exemption regime.

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