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V1663-17 27 June 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Age exemption over 65 requires property to be classified as a primary residence

A query was raised regarding whether the taxpayer's age or the duration of residence takes precedence for the capital gains tax exemption upon the sale of a property. The Directorate General for Tax (DGT) ruled that the property must meet the requirements of a primary residence to qualify for the exemption.

The question raised

What prevails when applying for the exemption of the capital gain generated in the transfer of a dwelling: the fact that the taxpayer is over 65 years of age or that the transferred dwelling has attained the status of a primary residence.

The DGT's ruling

For the transfer of a dwelling by persons over 65 years of age to be exempt, the dwelling must be considered a primary residence. According to the regulations, this requires residing in it for a continuous period of three years, except in exceptional circumstances requiring a change of residence. If such consideration is not met, the capital gain shall be subject to taxation in its entirety, regardless of the age of the transferor.

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