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V1110-22 19 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Exemption for those over 65 cannot be applied if the property was not the primary residence in the two years prior to sale

A married couple over the age of 65 enquired whether the sale of a property that had been their home until 2002 was exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that the exemption does not apply because the property had not been their habitual residence during the two years preceding the transfer.

The question raised

Whether the capital gain derived from the sale of the dwelling is exempt from taxation under Personal Income Tax (IRPF).

The DGT's ruling

In order for the gain from the sale of the dwelling to be exempt due to being over 65 years of age, the building must be the habitual residence at the time of the transfer or have been so on any day during the two preceding years. In this case, as the taxpayer has not resided in it since 2002, it does not meet the requirement of habitual residence required by the Tax Regulations. Therefore, the capital gain must be included in the savings tax base.

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