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V0079-17 19 January 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · nuda propiedad

Sale of bare ownership of primary residence by those over 65 may be exempt from Income Tax

A 70-year-old taxpayer inquired whether the sale of the bare ownership of their home is exempt from taxation. The Directorate General of Taxes (DGT) stated that the exemption for individuals over 65 requires the taxpayer to hold full ownership of the primary residence.

The question raised

Whether the potential increase in wealth is exempt from taxation, and how to reflect it on the Personal Income Tax (IRPF) form.

The DGT's ruling

If full ownership of the dwelling is dismembered between the bare owner and the usufructuary, neither of them may apply the exemption for the transfer of the primary residence. However, if the taxpayer holds full ownership and transfers either the bare ownership or the full ownership, the capital gain shall be exempt if the taxpayer is over 65 years of age and meets the requirements for a primary residence. The status of primary residence must be proven by the taxpayer.

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