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V5003-16 17 November 2016 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · ganancia patrimonial

Donating a property may be exempt from Income Tax if age, dependency, or habitual residence requirements are met

Homeowners residing in a care home have enquired whether donating their property to their children triggers capital gains tax. The DGT clarifies that the exemption depends on whether they are over 65 or are dependent persons, and whether the property served as their habitual residence during the two years prior to the transfer.

The question raised

The significance that said donation would have on the donors' Personal Income Tax (IRPF) declaration, and whether, consequently, they would have to pay tax on the resulting increase in wealth.

The DGT's ruling

The donation generates a capital gain or loss subject to Personal Income Tax (IRPF). There is an exemption for individuals over 65 years of age or persons in a situation of severe or great dependency if they transfer their primary residence. To apply this exemption, the property must have been the primary residence at that time or during the two years prior to the date of transfer.

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