Exemption

Regulations: Articles 38.1 Law Personal Income Tax , 41 Regulation Personal Income Tax

Capital gains obtained in the transfer of the taxpayer's habitual residence may be exempt, when the total amount obtained from the transfer is reinvested in the acquisition of another habitual residence under the conditions indicated below:

Without prejudice to the above, take into account the exemption of capital gains derived from the transfer of the habitual residence for people over 65 years of age or for people in a situation of severe or great dependency, as discussed in the section " Gains exempt assets ", of this same Chapter.

For these purposes the rehabilitation of the home is assimilated to the acquisition of the home, with such consideration being given to the works on the home that meet any of the following requirements:

1. That these are subsidized actions regarding housing rehabilitation in the terms provided for in Royal Decree 233/2013, of April 5, which regulates the State Plan for the promotion of housing rental, building rehabilitation, and urban regeneration and renewal, 2013-2016.

2. That have as their main objective the reconstruction of the home through the consolidation and treatment of the structures, facades or roofs and other similar ones, provided that the overall cost of the rehabilitation operations exceeds 25 percent 100 of the acquisition price if this had been carried out during the two years immediately prior to the start of the rehabilitation works or, otherwise, of the market value of the home at the time of said start. For these purposes, the proportional part corresponding to the land will be deducted from the acquisition price or market value of the home.

Likewise, the taxpayer can also obtain the tax benefit of the reinvestment exemption if he allocates the amounts obtained from the sale of the habitual residence to satisfy the price of a new habitual residence under construction, including the possibility of self-promotion.

In accordance with the doctrine established by Supreme Court Ruling no. 1098/2020, of July 23, 2020, relapsed into contentious-administrative appeal no. 4417/2017 ( RED : STS 2698/2020) in the case of reinvestment in future construction, two requirements must be met for the reinvestment exemption to apply:

 1) That the entire amount received be applied to the construction of the new home, within the reinvestment period of two years.

 2) That the requirements of article 55 of the Personal Income Tax Regulations are met in the wording in force as of December 31, 2012, in accordance with the eighteenth transitional provision of the Law IRPF ##2##and the twelfth transitional provision of the IRPF Regulations. For which the completion of the works must be proven within a period of four years, except for the extension provided for in sections 3 and 4 of article 55 of the Personal Income Tax Regulations .