Tax authorities They generally monitor the movements of Spaniards to avoid tax evasion and especially when it involves an important transaction, such as the sale of a house. In Spain, putting a house up for sale and successfully selling it is synonymous with paying taxes and also if you are over 65 years old. It is also true that for this group of people, who are in most cases retirees, the Tax agency It has some exemptions if you meet certain conditions.
In Spain, people who sell a house must settle their accounts with Tax authorities concerning three taxes. The first and most important of these is the Income tax that you will have to pay for the profit you get from the sale of the house. It is always ahead when it comes to profiting from the sale of real estate. In the income tax return corresponding to the year of sale you will need to contact the Tax Agency.
Another tax that a home seller will have to pay is the municipal capital gain, which is an amount related to the increase in the value of the property from the time the home was purchased until its sale years later. . This tax, levied over time, is linked to the increase in the value of urban land. If the value of the land does not increase, the tax will not be paid. Another cost the seller will face is the IBI for the remainder of the year’s proportionate share.
No one in Spain is exempt from these taxes when selling a house, but those over 65 benefit from some exemptions, according to the publication Tax agency via its official channels. For example, the Treasury specifies that this group of people, who are generally retirees, “is not required to declare the capital gain resulting from the transfer, onerous or lucrative, of the habitual residence if you are over 65 years old or if you are a person in a situation of serious dependence or great dependence in accordance with the law for the promotion of personal autonomy and the care of people in a situation of dependence.
Exemptions for those over 65
There are more cases of tax exemptions for people over 65 when selling a house and one is included in the article 41.bi of RD 439/2007. Here the rule says that members of this group will not have to pay income tax if the sale takes place in relation to a habitual residence. For this to be considered in this way, you must have resided there for the three years preceding the purchase and sale.
THE Tax agency It also specifies that people over 65 will not pay taxes on the sale of any type of assets, whether real estate or shares, provided that the income is used to insure a pension supplement. “Those over 65 who sell a second home will be exempt from personal income tax when the profits from the sale of the property are used to constitute a life annuity,” she reports. Thus, in case of investment of the income obtained in the pension, it will not be necessary to pay taxes.
What the Treasury says about over 65s
THE Tax agency It has a section on exemptions for this group called “Transmission of habitual residence of persons over 65 years of age” in which it specifies the conditions that must be met to be able to proceed with an exemption from personal income tax for people belonging to this group.
“Property gains arising from the transfer by people over 65 of their habitual residence are exempt. The exemption also applies in the event of transfer of bare ownership and life usufruct of the reserved accommodation”, informs the Tax Agency while specifying that: “For the application of this exemption, it is understood that the taxpayer transmits his habitual residence when said exemption is mentioned. immovable constitutes your habitual residence at that time or had such consideration until any day of the two years preceding the date of the transfer.
“When full ownership of a home is shared between the bare owner and the usufructuary, this exemption will not apply to any of them,” specifies the Tax agency. In this way, people over 65 who sell a house in Spain are protected to avoid paying taxes that could arise from its sale.
