The over-65 capital gains tax exemption in Spain: selling your main residence tax-free after 65 in 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 if they live in the EU, Iceland, Norway, or the EEA with effective tax information exchange, and 24% if they live in the rest of the world, 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. The DGT reinforced the principle in binding consultation V1261-25 of 9 July 2025, confirming the exemption also covers a gratuitous donation (donación) of the main residence by a seller aged 65 or over, including the donation of the nuda propiedad with a reserved life usufruct. 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. The Agencia Tributaria, in its IRPF 2025 manual for over-65s (page updated 26 March 2026), confirms 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. 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 if they live in the EU, Iceland, Norway, or the EEA with effective tax information exchange, and 24% if they live in the rest of the world, 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% or 24% charge on the full gain.

Can a non-resident claim the reinvestment relief instead?

Yes, in a specific set of cases that the original framing of this exemption often misses. Disposición adicional séptima of the Texto Refundido de la Ley del IRNR extends the Article 38 reinvestment exemption to non-residents who live in the EU or the EEA with effective tax information exchange. The Agencia Tributaria confirms this applies to gains accrued since 1 January 2015. The mechanism is not the IRPF return a resident files; it is a refund claim filed on Modelo 228 (Solicitud de devolución por exención por reinversión en vivienda habitual para contribuyentes de la UE y del EEE con efectivo intercambio de información tributaria).

The conditions mirror the resident relief: the full sale proceeds must be reinvested in a new main residence within two years before or after the sale, and if only part is reinvested only the proportional part of the gain is exempt. The new main residence can be in Spain or in another EU or EEA member state, which is a point the Agencia Tributaria’s manual makes explicit for non-residents. A non-resident outside the EU and EEA, including a UK resident post-Brexit who does not fall under an EEA effective-exchange arrangement, cannot claim this relief and pays the flat IRNR rate on the full gain. The inheritance planning guide for non-residents covers how residency status shapes the wider tax position.

This distinction matters for a Costa del Sol owner who has moved back to the UK or another non-EU country before selling. If they left Spain and became non-resident, the over-65 exemption is gone, and if they live outside the EU and EEA effective-exchange area, the reinvestment relief is gone too. The full IRNR rate applies unless a double-taxation treaty offers credit in the country of residence.

What are the 2025 and 2026 capital gains rates?

For the 2025 tax year (declared in spring 2026), the LIRPF savings base rates that apply to capital gains for Spanish tax residents are tiered. The Agencia Tributaria’s IRPF 2025 manual confirms the brackets, amended by Ley 7/2024 of 20 December 2024, which raised the top state bracket from 14% to 15% effective 1 January 2025. The combined state and autonomic rates a resident actually pays on a capital gain are:

Gain bracket (EUR)	Combined rate 2025
0 to 6,000	19%
6,000 to 50,000	21%
50,000 to 200,000	23%
200,000 to 300,000	27%
Over 300,000	30%

The new 30% top bracket, introduced for the 2025 tax year, is the figure a high-gain Costa del Sol sale most often touches. A EUR 400,000 gain on a Marbella apartment, for example, now carries a tax bill of roughly EUR 90,200 under the savings base, against roughly EUR 84,000 under the prior 28% top bracket. For an over-65 seller whose gain is exempt under Article 33.4.b, that entire liability disappears.

For non-residents, the IRNR rate is flat. The Agencia Tributaria’s IRNR rate table confirms 19% for residents of the EU, Iceland, and Norway (extended to the EEA with effective information exchange since 11 July 2021), and 24% for the rest of the world. There are no brackets; the full gain is taxed at the single rate.

Worked examples: over-65 and non-resident Costa del Sol sale scenarios

Three scenarios show how the reliefs interact with real numbers.

Scenario 1: a 68-year-old Marbella resident selling the main home. A Spanish tax resident bought a Marbella apartment for EUR 300,000 in 2012 and sells it for EUR 1,100,000 in 2026, a gain of EUR 800,000. Under the 2025 savings base rates, a non-exempt seller would owe roughly EUR 196,200 on that gain. Because the seller is 65 or over and the property was the main residence, Article 33.4.b exempts the entire gain. The seller keeps the full EUR 800,000, pays no IRPF on it, and owes only the plusvalia municipal on the land-value increase. No reinvestment, no Modelo 211, no Modelo 210. The gain is declared as exempt on the annual IRPF return (Modelo 100).

Scenario 2: a 72-year-old selling a second home with a life annuity reinvestment. A resident bought a holiday apartment in Estepona for EUR 200,000 and sells it for EUR 500,000, a gain of EUR 300,000. This is not the main residence, so Article 33.4.b does not apply. Under the 2025 savings base, the tax would be roughly EUR 67,200. Article 38.3 offers a route: if the seller reinvests the full EUR 500,000 in a life annuity within six months, the gain is exempt up to the EUR 240,000 per-taxpayer cap. Because the proceeds exceed the cap, the exemption applies proportionally to the capped amount, leaving a residual taxable gain on the EUR 260,000 above the cap. The reverse mortgage and property life annuity guides cover the wider equity-release landscape a retiree faces.

Scenario 3: a German resident selling a Marbella holiday home. A non-resident who lives in Germany sells a Spanish property for a gain of EUR 400,000. The over-65 exemption does not apply, because the seller is not a Spanish tax resident. The IRNR rate for an EU resident is 19%, so the tax is EUR 76,000, with a 3% buyer retention under Modelo 211 reconciled via Modelo 210. However, if the property was the seller’s main residence at the time of sale or within the two years before, and the seller reinvests the full proceeds in a new main residence in Spain or another EU or EEA state within two years, Disposición adicional séptima of the TRLIRNR exempts the gain, claimed via Modelo 228. If the seller lived outside the EU and EEA effective-exchange area, neither the over-65 exemption nor the reinvestment relief would be available.

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 savings-base rates set out above.

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.