One of the main concerns of retirees is the payment of taxes on your pensions and assets. Even if pensions are subject to Personal Income Tax (IRPF)there are exemptions and reductions that apply to certain types of pensions and specific situations. These exemptions include, for example, permanent disability pensions in cases of serious disability or those derived from situations of gender violence or terrorism.
In addition, certain local taxes, such as the property tax (IBI), include reductions or even exemptions for retirees, depending on municipal regulations. In this sense, some autonomous communities They offer bonuses that vary depending on the income and socio-economic situation of each retiree. On the other hand, the exemption capital gains from the sale of the habitual residence is another of the tax advantages that residents can benefit from. retirees over 65who will not have to pay taxes on the profits obtained if they sell their house.
Taxes retirees don’t have to pay
People over 65 benefit from various tax exemptions linked to sale of your habitual residence. According to the Tax Agency’s regulations, retirees can sell their main residence without having to pay taxes on the profits obtained through this transaction, whether they receive a one-off payment or decide to carry out the sale in exchange of a life or temporary annuity.
This advantage applies both in the case of sales involving a added value as when the sale is made through a rental contract. However, if the accommodation is owned by more than one person, the exemption will only apply to the owner aged over 65. Thus, if the property has two co-owners and only one has reached this age, the exemption can only apply to the corresponding part of said owner.
On the other hand, retirees who sell their property and allocate the money to creation of a life annuity They can also benefit from an exemption from paying tax on capital gains obtained. To benefit from this exemption, certain specific conditions must be met, such as for example that the annuity is constituted within six months following the sale of the property and that. Its value does not exceed 240,000 euros. This type of exemption offers a constant and secure source of income to those over 65 without being taxed on the gains made during the sale.
Regarding other taxes, such as Inheritance and gift taxesretirees can benefit from reductions or bonuses depending on the autonomous community in which they reside. Regions like Madrid and Andalusia have significant bonuses that can significantly reduce the payment of this tax for direct heirs, making it easier to pass on wealth to descendants without such a high tax burden.
There are also tax advantages regarding Property tax (IBI)a tax that taxes real estate property. In several municipalities, retirees can access reductions of up to 75% on this tax if they meet certain economic conditions, which reduces the tax pressure on their economy, especially in cases where income is limited.
Income tax
Retirement pensions are subject to Personal Income Tax (IRPF)since they are considered labor income, in the same way as wages. The amount to pay for personal income tax depends on the recipient’s annual pension and other personal factors, such as marital status, number of children or whether they suffer from a disability.
By 2024, there will be several retention sectionswhich vary between 1% for pensions below 12,000 euros and 15.59% for those above 30,000 euros per year. Furthermore, if the retiree has other income, this is added to the tax base and the applicable tax rate is determined according to the general income tax brackets, which range from 19% for income up to 12,450 euros, up to 47% for income above 12,450 euros. the 600,000 euros.
However, not all pensions are subject to personal income tax. There are tax exemptions for certain vulnerable groups or specific situationssuch as permanent disability pensions in absolute and severe degree of disability, which are tax-exempt. Also included in this list are pensions from the passive class regime due to total uselessness, orphan’s pensions and those derived from acts of terrorism or mutilations resulting from the civil war.
In addition, only retirees who exceed the 22,000 euros per year of income They must file a tax return, but if they receive income from several taxpayers and exceed 1,500 euros per year, this threshold is reduced to 14,000 euros.
In summary, the tax system offers various exemptions and benefits to mitigate the tax burden on retirees.
