The Over-65 Capital Gains Tax Exemption in Spain: Selling Your Main Residence Tax-Free After 65 (2026)

Spanish tax residents aged 65 or over can sell their main residence and pay zero capital gains tax on the profit, with no obligation to reinvest the proceeds. The exemption, set out in Article 33.4.b of Ley 35/2006 (the LIRPF), is one of the most generous reliefs in the Spanish tax code and one of the most misunderstood. It is distinct from the reinvestment relief in Article 38, it applies only to residents, and it carries a set of ownership and residence tests that catch foreign owners who assume a Spanish home sale in retirement is automatically tax-free.

Who qualifies for the over-65 CGT exemption in Spain?

A Spanish tax resident who has reached the age of 65 before the date of sale can exempt the entire capital gain on their main residence, with no reinvestment requirement. The Agencia Tributaria confirms the exemption is governed by Article 33.4.b of the LIRPF and Article 41 bis of the Reglamento del IRPF, and that it also extends to people in a situation of dependencia severa or gran dependencia under Spain’s dependency law, regardless of age. The relief applies whether the sale is for a lump sum or in exchange for a rent, temporal or vitalicia.

The exemption is an IRPF benefit. That means it is available only to Spanish tax residents, not to non-residents who file under the IRNR regime. A non-resident who sells Spanish property pays a flat 19% CGT on the gain, regardless of age. Your residency status at the date of sale is the determining factor. If you are weighing your residency position, the 183-day tax residency rule is the first thing to establish.

What counts as a main residence under the exemption?

The Agencia Tributaria defines vivienda habitual as an edification in which the taxpayer resides for a continuous period of at least three years. The property must have been the seller’s main residence at the moment of sale, or at any point in the two years before the sale. The Agencia Tributaria states this two-year lookback applies to both the over-65 exemption under Article 33.4.b and the reinvestment relief under Article 38, giving a seller who has already moved some latitude, provided the move was recent.

The property must be inhabited effectively and permanently by the taxpayer within 12 months of acquisition or completion of works. The three-year continuous residence requirement can be waived if circumstances necessarily forced a change of domicile, such as marriage, separation, a job relocation, first employment, or comparable justified events. A voluntary move does not qualify; the trigger must be something the taxpayer could not avoid.

The exemption also applies to a seller who transfers the nuda propiedad (bare ownership) of their main home while reserving a life usufruct over it. The Agencia Tributaria is explicit on this point. However, if full ownership of the property was already split between a bare owner and a usufructuary at the time of sale, neither party can claim the exemption, even if the property was their main home. The Tribunal Supremo, in its judgment of 12 December 2022 (recurso 7219/2020, ROJ STS 4569/2022), established that pleno dominio during the three-year residence period is required for the reinvestment relief under Article 38, and the same full-ownership principle underpins the over-65 exemption when the sale involves a pre-existing split of title.

How does the over-65 exemption differ from the reinvestment relief?

This is the distinction that matters most in practice. Article 33.4.b, the over-65 exemption, requires no reinvestment. You sell, you keep the money, and the gain is exempt. Article 38.1, the reinvestment relief, requires you to reinvest the sale proceeds in another main residence within two years before or after the sale, and it is available to residents of any age. The over-65 exemption is the more generous route because it imposes no condition on what you do with the proceeds.

A third relief, Article 38.3, applies to over-65 sellers of any asset, not just a main residence. It exempts the gain if the full proceeds are reinvested in a life annuity (renta vitalicia asegurada) within six months, capped at EUR 240,000 per taxpayer. This is useful for a retiree selling a second home or investment property who wants to convert the capital into a guaranteed income stream without a tax charge on the sale.

The three CGT reliefs on a main-residence sale compared

Relief	Legal basis	Age requirement	Reinvestment required	What you sell	Key limit
Over-65 exemption	Art. 33.4.b LIRPF	65 or over	None	Main residence only	Must be main home at sale or within prior 2 years
Reinvestment relief	Art. 38.1 LIRPF	Any age	Full proceeds into another main home within 2 years	Main residence only	Gain exempt proportionally to amount reinvested
Life annuity reinvestment	Art. 38.3 LIRPF	65 or over	Full proceeds into a life annuity within 6 months	Any asset	EUR 240,000 cap per taxpayer

Does a non-resident qualify for the over-65 exemption?

No. The exemption is an IRPF relief, and IRPF is the tax regime for Spanish tax residents. A non-resident who sells Spanish property is taxed under the IRNR at a flat 19% on the capital gain, with a 3% buyer retention under Modelo 211 that is reconciled via Modelo 210. There is no age-based exemption in the IRNR framework. This is a structural difference between the two regimes, not a gap that can be bridged by timing.

If a resident becomes non-resident before selling, they lose the over-65 exemption even if they are 65 or over at the time of sale. The non-resident CGT and 3% retention rules apply in full. A resident who plans to sell their main home after age 65 should confirm their tax residency is intact at the date of the transaction, because a premature move abroad can convert a tax-free sale into a 19% charge on the full gain.

What happens with a second home or investment property?

The over-65 exemption in Article 33.4.b applies only to a main residence, not to a second home, a holiday apartment, or a rental investment. If you are 65 or over and selling a second property in Spain, the main-residence exemption does not apply. The gain is taxable under IRPF at the standard savings-base rates.

However, Article 38.3 offers a route. If you reinvest the full sale proceeds in a life annuity within six months, the gain is exempt up to the EUR 240,000 per-taxpayer cap. The Agencia Tributaria specifies the annuity must be contracted with an insurance entity, have a periodicity of no more than one year, begin within a year of constitution, and not decrease by more than 5% year on year. The taxpayer must inform the insurer that the annuity constitutes the reinvestment for exemption purposes. If only part of the proceeds is reinvested, only the proportional part of the gain is exempt.

How does the exemption interact with the selling process?

The over-65 exemption removes the capital gains tax liability on the sale, but it does not remove other taxes that fall on a Spanish property transaction. A seller aged 65 or over still faces the plusvalia municipal (IIVTNU), the local land-value tax charged by the town hall, and the 3% Modelo 211 buyer retention does not apply to residents in any case. The retention mechanism is specific to non-resident sellers, so a resident over-65 sale does not trigger it.

The practical sequence for a resident over-65 sale is simpler than a non-resident sale. There is no Modelo 211 retention to reclaim, no Modelo 210 CGT filing, and no reinvestment deadline to track. The gain is declared as exempt on the annual IRPF return (Modelo 100). The complete selling process still applies for the notary, Land Registry, and plusvalia steps. The IRPF framework for property owners sets out how the exempt gain is reported on the return.

What are the key eligibility traps?

Several situations disqualify or complicate a claim. First, if the property was not your main residence at the time of sale or at any point in the two years before, the exemption does not apply, even if you lived there for decades earlier in life. A long-ago main home that became a rental or a holiday home loses the qualification.

Second, if full ownership was split into usufruct and bare ownership before the sale, the Agencia Tributaria is explicit that neither the usufructuary nor the bare owner can claim the exemption. This catches owners who restructured their property for inheritance planning, a common move among foreign owners in Spain, and then try to sell in retirement. The Tribunal Supremo judgment of December 2022 confirmed that pleno dominio during the three-year residence period is required for the reinvestment relief, and the same logic applies to the over-65 exemption.

Third, the divorce or separation scenario has a specific carve-out. The Tribunal Supremo, in its judgment 553/2023 of 5 May (recurso 7851/2021, ROJ STS 2021/2023), ruled that a spouse who was required to leave the family home due to separation or divorce still meets the occupation requirement if the spouse who remained in the property treated it as their main residence at the time of sale or in the two years before. This matters for a former couple selling a jointly owned home after a divorce, where one party had moved out.

Fourth, the exemption does not extend to the plusvalia municipal. A seller aged 65 or over who is exempt from CGT still owes the local land-value tax to the town hall, calculated under the objective or real-gain method introduced by RDL 26/2021, with a 30 working day filing deadline.

This guide is general information, not legal or tax advice. Rules change and individual circumstances differ. Verify current requirements with an independent lawyer (abogado) or tax advisor (gestor/asesor fiscal) before acting.