The transfer of property within the family, often from parents to children, raises significant tax questions, especially when the value of the asset has increased over the years. This operation, under normal conditions, implies a change in assets that must be taxed in the income declaration.
However, article 33.4.b) of the IRPF Law provides for specific treatment for taxpayers who have reached the age of 65. This exception allows the potential capital gain derived from the transfer of the primary residence to be exempt from taxation in the Personal Income Tax.
This exemption does not distinguish between onerous and lucrative transfers, so it applies to both the sale and the donation of the primary residence.
For the tax benefit to apply, it is essential that the property qualifies as the primary residence. The IRPF Regulation requires that it must have been the taxpayer's residence for a continuous period of at least three years, or that it had this status on any day within the two years prior to the date of transfer.
The General Directorate of Taxes (DGT) emphasizes that this exemption only affects the donor's IRPF. The children or beneficiaries receiving the property must settle the Inheritance and Donation Tax, regulated by regional legislation, and the municipal capital gains tax before the corresponding city council.
