If I am over 65 and sell my home, do I pay tax?

Question

José Manuel Alburquerque · Accepted Answer

If it is your principal residence, you do not pay the “IRPF”, Spain's personal income tax, on the gain, whatever the amount and without having to reinvest. It is enough that it is your principal residence when you sell it or that it was at any time in the previous two years. If you sell another property, such as a second home or a let flat, you pay tax on the gain like any other seller, unless you put the proceeds into a life annuity. The “plusvalía municipal”, the municipal capital gains tax, is still payable, because it has no reduction for age. The principal residence exemption If you are over 65, the gain on selling your principal residence is not subject to income tax. The same applies, at any age, to anyone in a situation of severe or major dependency (“dependencia severa” or “gran dependencia”). Bear in mind the following: If you have moved into a care home or in with a relative, you have two years from when you left your home to sell it with the exemption. If the October 2026 decree is ratified by Parliament (“convalidación”), that is, if the “Congreso”, the lower house, confirms it, for anyone who has moved into a care home or into the home of a relative up to the third degree, the home will continue to count as their principal residence if it was so until the move. If the home belongs to both spouses and only one is over 65, in principle only the share of the spouse who has reached that age is exempt. What counts is who owns the home according to the deed. It also applies if you sell the home and keep the usufruct for life, that is, the right to go on living in it. It does not apply, however, if all you own and sell is the usufruct. If it is not your principal residence If you sell a second home, a let flat or your parents' home that you inherited, you pay tax on the gain like any other seller. But, as you are over 65, you have another way of not paying: You do not pay tax on the gain if, within the following six months, you use the proceeds to take out a life annuity in your favour with an insurer, which will pay you for as long as you live, up to a maximum of 240.000 euros per person. If you put in less, the exemption is proportional. The annuity must be paid annually or more often, start being paid within a year and not fall by more than 5 % from one year to the next. You must tell the insurer that it is being taken out with money from a sale. If you later surrender it, you have to pay tax on the gain. If you bought the home before 1995, the gain may also be reduced because of how long you have owned it. What you still pay Neither the law nor Barcelona's municipal ordinance provides for any reduction in municipal capital gains tax for the seller's age, so you still pay it, unless the land has not gained in value. The IBI, the local property tax, for the year of the sale is owed by whoever was the owner on 1 January, although, unless otherwise agreed, they can charge the buyer for the days on which the flat already belongs to the buyer.