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V3100-18 29 November 2018 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Sale of non-primary residence by those over 65 is not tax-exempt, unless used for life annuity

A person over 65 has enquired whether capital gains from the sale of a property that is not their primary residence are exempt from tax. The Directorate General for Tax Affairs (DGT) has ruled that the gain is subject to tax as the requirement of it being a primary residence is not met.

The question raised

Whether the capital gain obtained from its sale is exempt from Personal Income Tax.

The DGT's ruling

The transfer of real estate generates a capital gain or loss subject to tax. The exemption for individuals over 65 years of age only applies if the transferred property is the taxpayer's primary residence. As it is not the primary residence, neither the exemption for the transfer of a residence nor the exemption for reinvestment in a primary residence applies. However, the exemption could apply if the amount is used to establish an insured life annuity under the terms of the law.

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