Selling your home after 65: tax-free — and 240,000 euros for everyone else

What is exempt

Article 33.4 b) and additional provision 15 of law 35/2006 exempt the gain on the transmission of the vivienda habitual by people over 65 and by those with dependencia severa or gran dependencia. The Agencia Tributaria says it then need not be declared; nothing has to be reinvested and there is no ceiling. Only the main home is covered — a second home, a let flat and a holiday let go into the savings base.

Vivienda habitual

Under article 41 bis of the regulation (Real Decreto 439/2007), as reproduced by the Agencia Tributaria, it is the building serving as the taxpayer's residence "for a continuous period of at least three years" and occupied "effectively and permanently within twelve months" of acquisition. Exceptions to both periods: death, and circumstances that necessarily require a change of home — marriage, separation, a job move, a first or more advantageous job, a disability in the household.

The two-year rule matters more: it also counts if the property was the main home up to any day in the two years before the sale. The Renta manual additionally requires full ownership (pleno dominio) over the three years.

Step by step: who qualifies, what to prove

1. Residence. On the AEAT's criteria you are resident if you spend more than 183 days of the calendar year in Spain or have the main base of your economic interests here. Residence counts, not nationality.

2. Age. You must be 65 when the sale is completed, not merely at some point in the tax year.

3. Status and ownership. Three years of residence in full ownership, occupation within twelve months, and main home now or up to some day in the last two years.

4. Evidence. Law and regulation do not prescribe how the main home is proved. The usual items: padrón, electricity and water bills, bank statements — collect them before the sale.

5. Co-ownership. Separate the shares; each co-owner is assessed alone.

6. If the exemption fails. The six-month annuity window runs from the sale — the one deadline that cannot be made up later.

7. Declare. The exempt gain need not be declared; a non-exempt part belongs in the following year's Renta. Non-residents use form 210, on the AEAT's account within three months after the one month from the transmission has elapsed; the buyer pays over his 3 per cent on form 211 within one month. The municipal plusvalía runs alongside.

Co-ownership and usufruct

The commonest question from couples: what if only one of us is over 65? Article 11.5 of law 35/2006 attributes gains to the owners of the assets, and article 33.4 b) attaches to "the taxpayer". In a home held half and half, the 67-year-old's share is exempt and the 63-year-old's is not.

On usufruct the AEAT distinguishes: where a person over 65 transfers only the bare ownership and keeps the lifetime usufruct, the exemption applies. Where full ownership is already split, neither party can use it on the authority's account; it cites a Supreme Court ruling (STS 1858/2018).

The second route: 240,000 euros into a life annuity

Article 38.3 of the law and article 42 of the regulation exempt, for taxpayers over 65, the gain on the disposal of any asset if the proceeds go within six months into a life annuity insured in their favour. Ceiling on the AEAT's figure: 240,000 euros; on partial reinvestment, only the corresponding part.

The contract runs between the taxpayer, as beneficiary, and an insurer. The annuity must have a periodicity of one year or less, must begin to be paid within one year of being set up, and the annual amount may not fall by more than 5 per cent against the previous year; the insurer must be told of the reinvestment. If a condition is breached or the rights are drawn early, a complementary self-assessment with late-payment interest falls due.

Non-residents — and the Canaries

The AEAT manual on the taxation of non-residents has no age-based exemption for property sales: 19 per cent on the gain, a 3 per cent withholding by the buyer, form 210. The only exemption is reinvestment in a new main home — restricted to residents of an EU or EEA state with exchange of tax information, proportional where reinvestment is partial.

There is no Canary particularity; in the catalogue of Canary income tax deductions we found none that concerns the sale of your own home.