Personal Income Tax (IRPF) exemption for those over 65 in physically connected contiguous properties

The Directorate General of Taxes (DGT) has issued a relevant criterion for individuals over 65 who own properties that, although registered independently, are physically connected internally. This resolution addresses the possibility of applying the IRPF exemption derived from the transfer of the habitual residence under these specific circumstances.

What the DGT has resolved

The advisory body has determined that there is no legal impediment to considering two contiguous properties that are internally connected as a habitual residence, even if there is no registry union between them. The fundamental requirement is that the taxpayer resides in said properties on a habitual basis.

Under this scenario, if the requirements for habitual residence are met and the taxpayer is over 65 years old, the exemption provided in article 33.4.b) of the IRPF Law is applicable. This exemption can be exercised whether the set of properties is transferred together or if the sale is carried out independently.

What this means for you

This criterion benefits taxpayers living in properties that, due to their architectural configuration, function as a single residential unit despite being listed as distinct estates in the Land Registry. If you are over 65 and plan to sell one of these properties, the regulations allow it to be considered a habitual residence to avoid taxation on capital gains, provided that effective residential use is demonstrated.

What you should do

Since the accreditation of residence is a matter of fact, it is essential that the taxpayer has solid means of proof demonstrating habitability and permanence in said properties. The burden of proof lies with the taxpayer in the event of an inspection. It is recommended to assess each particular situation to ensure that the configuration of the dwelling and the residency documentation comply with current regulations.