Personal Income Tax exemption for home sales by those over 65: the full ownership requirement

The application of the exemption in Personal Income Tax (IRPF) for the transfer of a primary residence for those over 65 requires strict compliance with certain temporal and ownership requirements. A recent binding ruling from the Dirección General de Tributos (DGT) has specified how residence time must be calculated to access this tax benefit.

What the DGT has ruled

The question posed focused on determining whether a home could be considered a primary residence for the purposes of the exemption provided in article 33.4.b) of the IRPF Law. The DGT has established that, for the transfer of a building to be exempt, it must have constituted the habitual residence for a continuous period of at least three years.

A decisive aspect of this ruling is that said three-year calculation requires the taxpayer to have held full ownership of the home throughout that entire period. Consequently, it is not possible to include in the calculation the time spent in the property prior to acquiring full ownership. If the sale occurs before three years have passed since the taxpayer held said ownership, the home will not be considered a primary residence for the purposes of this specific exemption.

What this means for you

This criterion directly impacts individuals over the age of 65 who plan to sell their main residence. It is not enough to have lived in the home for the time required by the regulation; it is imperative that the property has been under your full ownership during that same period. If you acquired the property recently, even if you have been residing in it for longer, the three-year period will begin to be counted from the date you obtained full ownership.

What you should do

In an operation of this type, it is necessary to verify the exact date of acquisition of full ownership and contrast it with the actual residence time. It is fundamental to analyze the legal status of ownership to avoid contingencies with the Tax Administration. It is recommended to assess each particular case to ensure that the requirements of the IRPF Law and the IRPF Regulation are met before proceeding with the transfer.