Selling a home has great tax implications, and sellers have to face paying taxes. But it must be taken into account that when it comes to the habitual residence, These can benefit from a deduction if the money is intended to be reinvested in the purchase of a new home. It is about the personal income tax exemption for reinvestmentbut it must be taken into account that this cannot always be applied.
The notary María Cristina Clemente warns, through a video published through the social networks of the Buendía notary, of a very common situation that can prevent access this tax advantage. These are cases in which a person buys a home alone before marriage and, after marrying as a community property, it becomes the family home.
As he explains, the problem appears when, for years, the Income Tax continues to declare that the home belongs only to the spouse who initially acquired it, even though the mortgage is already paid within the marriage.
The error is in how the home is declared in the income
The notary points out that this ruling has direct consequences when the time comes to sell. As explained, “if the income was declared exclusive of the acquiring spouse, only the spouse can apply the exemption for the investment in habitual residence.”
This means that, even if both members of the couple have contributed to the housing payment for years, only one of them will be able to benefit fiscally from the reinvestment, thus losing an important part of the tax savings.
It is, as Clemente indicates, “a classic”, since many couples are unaware of how it affects the way in which they have declared the property in the personal income tax.
How to avoid this problem and apply the exemption correctly
To avoid this situation, the notary remembers that the law recognizes that the home can be marital in nature from the time of marriage. Specifically, it explains that “that first home is marital from the date of the marriage.”
For this reason, it is recommended to regularize the situation before the sale through a public deed, so that the ownership of the property is correctly reflected. From that moment on, both spouses must declare the home in their income according to this shared ownership, which will allow both to benefit from the reinvestment exemption.