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V2583-20 29 July 2020 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Donation of main residence by individuals over 65 may be exempt from Income Tax

An individual over the age of 65 has enquired whether the donation of their main residence to their daughter is exempt from capital gains tax. The Directorate General for Taxes (DGT) has ruled that the exemption applies, provided the requirements regarding age and the status of the property as a main residence are met.

The question raised

Exemption of capital gains derived from the donation of a habitual residence by a person over 65 years of age.

The DGT's ruling

The donation generates a capital gain or loss quantified by the difference between the transfer value (pursuant to Inheritance and Gift Tax regulations) and the acquisition value. If the property is the donor's habitual residence and the donor is over 65 years of age, the resulting capital gain shall be exempt according to Article 33.4.b) of the Personal Income Tax Law (LIRPF). To qualify as a habitual residence, it must have been the residence for at least three years or meet the assumptions for change of residence provided in the Regulations.

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