People over 65 can apply for Personal Income Tax (IRPF) exemption if they sell their home up to two years after moving out
The application of the exemption in Personal Income Tax (IRPF) for the transfer of a primary residence has raised doubts regarding the exact moment the age requirement must be met. The Dirección General de Tributos (DGT) has specified the terms so that taxpayers can benefit from this tax relief.
What the DGT has ruled
The query concerned whether a person had to turn 65 while residing in the home or if it was sufficient to be that age on the date of the sale. The binding body has determined that, to apply the exemption provided for in article 33.4.b) of the IRPF Law, two concurrent conditions must be met:
- Residency condition: The property must be the primary residence at the time of the sale or must have been so on any day during the two years prior to the transfer.
- Age condition: The taxpayer must be 65 years of age or older at the time the transfer is carried out.
Therefore, if the sale is carried out at age 65 and within the two-year period since ceasing to reside in the property, both legal requirements for the exemption are met.
What this means for you
This criterion is relevant for individuals who have left their primary residence to move to another home but wish to sell their former property without paying tax on the resulting capital gain. It is not necessary for the taxpayer to maintain their residence in the property being sold until the day the deed is signed, provided that the transfer occurs within the two-year margin after the change of residence and that the minimum age is reached before or on the date of the transaction.
What you should do
In such a situation, it is necessary to prove that the home was the primary residence in the two years prior to the sale. It is essential to verify that the age of 65 is reached before the date of the transfer to ensure the right to the exemption. It is recommended to assess each particular situation to confirm that the deadlines and requirements of the current regulations are met.
Frequently asked questions
- Must I live in the house until I turn 65 to avoid paying IRPF?
- No, it is sufficient to have resided in it in the two years prior to the sale and to be 65 years old at the time of the transfer.
- What is the maximum period to sell the home after ceasing to reside in it?
- The period is two years from when you stopped residing in the home to maintain the status of primary residence for the purposes of the exemption.