People over 65 may apply the primary residence exemption on multiple occasions

The transfer of a primary residence constitutes a case of exemption in Personal Income Tax (IRPF) that allows for the avoidance of paying the capital gain generated. Recently, the Directorate General of Taxes (DGT) has clarified the scope of this benefit for the most vulnerable groups.

What the DGT has ruled

The binding ruling addresses the possibility of applying the exemption provided for in Article 33.4.b) of the IRPF Law on more than one occasion. The criteria establish that the transfer of the bare ownership of the primary residence, carried out by persons over 65 or in a situation of dependency, is exempt from taxation on the capital gain.

The body confirms that this tax benefit can be used repeatedly. The fundamental requirement is that each transferred property meets the condition of being a primary residence at the time of the transaction or has been so during the two years immediately preceding the transfer.

What this means for you

If you are over 65 years old or in a situation of dependency, the regulations allow you to make movements regarding your real estate assets, such as the transfer of bare ownership, without this entailing a tax cost for capital gains, even if you have already used this right previously with another property.

It is important to highlight that the classification of a property as a primary residence is not automatic from an administrative point of view, but rather constitutes a matter of fact. This implies that the condition of residence must be demonstrable.

What should be done

In the event of such an operation, it is necessary to have valid means of proof that certify that the property has been the taxpayer's habitual residence at the time of the transfer or in the two previous years. The documentation supporting effective residence will be decisive to ensure the application of the exemption in accordance with the IRPF Law and the IRPF Regulations.