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V0561-22 18 March 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Exemption for sale of primary residence for those over 65 applicable via capital contribution

A taxpayer over the age of 65 enquired whether the primary residence exemption could be applied when contributing their home to a company as a capital increase. The Directorate General for Taxes (DGT) ruled that if the requirements regarding age and primary residence status are met, the exemption is applicable.

The question raised

Whether the exemption for capital gains derived from said transfer of a dwelling may be applied by virtue of Article 33.4.b) of the LIRPF.

The DGT's ruling

The non-monetary contribution of a dwelling to a company generates a capital gain or loss. If the transferor is over 65 years of age and the dwelling constitutes their habitual residence (or was so in the two preceding years), the resulting gain shall be exempt pursuant to Article 33.4.b) of the Personal Income Tax Law (LIRPF). The status of habitual residence is a question of fact that must be proven, and simple registration in the municipal register is insufficient.

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