Sale of Main Residence for people over 65
Waiting to turn 65 is not so risky for those who have already raised their children and the same have already left the family home. If you already have that age, the sale of your home is subject to a different tax regulation and it may mean the exemption from filing it in the income tax return.
Everything is stated in Article 41.bi of Royal Decree 439/2007 of March 30, which approves the normative of the Income Tax Return for Individuals (IRPF, for its acronym in Spanish) stating that “capital gains that arise from the transfer of the main residence of adults over 65 years-of-age area exempted, as well as in the case of people in severe or major long-term care dependency, according to the Law of Promotion of Personal Autonomy and Care for Dependent Persons.”
Additionally, that clarifies that if one of the spouses has not reached 65 years-of-age, the state of severe care dependency of the same must be demonstrated.
It is worth mentioning that what is mentioned hereinbefore in the law does not mean the sale is not going to be declared; all data related to the transaction of the main residence must be provided, but the same is exonerated from the payment of the IRPF.
In terms of the concept of main residence, the Treasury Department refers to it as the one “that has been the effective residence for two years prior to the sale.”
It should not be overlooked that compromises corresponding to the municipal tax gains (settled by the municipalities) still must be paid.
Therefore, the exemption previously explained only applies to main residences, being understood that any other residence or property “shall pay taxes in the income tax return.”
As it happens with any rule, there is “a novelty in relation to the most recent tax reform in force as of 2015, which benefits the collective,” since it is an exception to said norm: people over 65 years-of-age are released from paying taxes after the sale of a secondary residence if “the benefits obtained are destined to constitute a lifelong income” within a period of six months.
What is always pending to be paid are the municipal tax gains.
If another operation is performed, which is frequent in adults over 65, such as the donation of their home to their children or grandchildren, such taxes must be paid by those who purchase the property “through the Inheritance and Donations Tax, which is assigned to autonomous communities.”