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V3584-20 17 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

The reinvestment exemption cannot be applied if the new dwelling was acquired more than two years prior to the sale

The taxpayer sold their primary residence in 2019 and intended to apply the reinvestment exemption by using the proceeds to amortize the mortgage of a property purchased in 2003. The DGT rules that the exemption is not applicable because the acquisition of the new dwelling did not occur within the two-year period prior to the sale.

The question raised

Application of the reinvestment exemption on a primary residence if the amount obtained from the sale is reinvested in the dwelling acquired in 2003 by amortizing part of its mortgage, or if, conversely, the capital gain obtained must be taxed.

The DGT's ruling

For the reinvestment exemption, the new dwelling must be acquired within the two-year period preceding or following the transfer of the primary residence. In this case, the dwelling acquired in 2003 does not meet the requirement of having been purchased in the two years prior to the sale carried out in 2019. Therefore, the capital gain obtained from the sale must be taxed.

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