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V3595-20 17 December 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · exención por reinversión

Reinvestment exemption requires property to be habitual residence and held under full ownership for at least three years

The taxpayer asks whether they can apply for the reinvestment exemption on their primary residence after receiving a property as a gift, having lived in it prior to becoming the owner. The Directorate General for Taxes (DGT) rules that for a property to qualify as a habitual residence, it must have served as an effective residence and been held under full ownership for at least three continuous years since its acquisition.

The question raised

Possibility of applying the reinvestment exemption on the habitual dwelling for the capital gain obtained without having resided in it for 3 years since its acquisition.

The DGT's ruling

For a dwelling to be considered habitual for the purposes of the reinvestment exemption, it must have constituted the taxpayer's residence effectively and for a minimum period of three continuous years since its acquisition by the same. The period of residence prior to the acquisition of ownership cannot be computed. Therefore, if the transfer occurs before completing three years of residence since the acquisition, the exemption may not be applied.

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