Taxpayers will lose the exemption for the sale of their home if two years pass since they stopped residing in it

The application of the exemption in Personal Income Tax (IRPF) for the transfer of a primary residence is subject to strict temporal compliance. The Dirección General de Tributos (DGT) has specified the time limits that must be respected to avoid losing this tax benefit when selling a property.

What the DGT has ruled

The ruling analyzes the application of article 33.4.b) of the IRPF Law. The criteria establish that, for a building to be considered a primary residence for the purposes of the exemption, it must have served as an effective residence at the time of sale or on any day within the two years immediately preceding the date of the transfer.

Consequently, the taxpayer has a maximum period of two years from the moment they cease to effectively reside in the home to formalize its sale without losing the right to the exemption. If the transfer occurs once said two-year period from the cessation of residence has elapsed, it will not be possible to apply the tax benefit provided for in the regulations.

What this means for you

If you are an individual planning to sell your primary residence, it is fundamental that the operation's timeline aligns with the reality of your occupancy. The regulations do not allow a home to maintain its status as a "primary residence" indefinitely for tax purposes if the owner no longer resides in it.

This time limit directly affects the tax burden that would arise from the capital gain derived from the sale. If the operation is postponed beyond two years from when the property ceased to be your main residence, the resulting gain will be subject to ordinary taxation within the savings tax base.

What you should do

It is necessary to verify the exact date on which the change of effective residence in the property occurred. This data is the starting point for calculating the two-year period granted by law. It is recommended to rigorously monitor deadlines to ensure that the transfer is formalized within the legally established period and thus avoid contingencies with the Tax Administration.