COVID-19. Calculation of the period for reinvestment in main residence during the state of alarm.

Through a resolution from INFORMA, the AEAT answers the question of whether the time elapsed during the state of alarm is taken into account for the calculation of the reinvestment period, and if so, whether the deadline for making the reinvestment in a main residence expires during the state of alarm, if the two-year period established in the regulations of the IRPF is extended.

In resolution no. 142214 of the INFORMA, the AEAT responds to a question that, due to the situation we are experiencing at this time, some taxpayers have been affected in relation to the calculation of the two-year period for reinvestment in a new home of the amount obtained from the sale of the old home, in order to enjoy in the IRPF the exemption of capital gains that are revealed in the transfer of the taxpayer's main home when the total amount obtained is reinvested in the acquisition of a new main home.

Specifically, the question is whether:

Is the time elapsed during the state of emergency taken into account when calculating the reinvestment period? If the deadline for reinvesting in a primary residence expires during the state of emergency, is the deadline extended?

The Spanish Tax Agency (AEAT) explains that capital gains arising from the sale of a taxpayer's main residence may be exempt from Personal Income Tax (IRPF) when the entire amount received is reinvested in the purchase of a new main residence. This reinvestment must be made, either in a single transaction or in successive transactions, within a period not exceeding two years from the date of sale of the main residence.

However, the period of duration of the state of alarm will not be taken into account for the purpose of calculating the two-year period for reinvestment in a new home of the amount obtained from the sale of the old home, with the calculation of said period being stopped at the beginning of the state of alarm and resuming at its end.

You can contact this professional office for any questions or clarifications you may have.

Warm regards,