Sell Property in Spain Without IRPF: 4 Legal Exemptions

How to Sell Your Property in Spain Without Paying IRPF: 4 Legal Exemptions (2026 Guide)

Quick answer

Yes, you can sell a property in Spain without paying IRPF (Spanish personal income tax) on the capital gain, but only in four cases set out in the IRPF Law (arts. 33.4.b and 38):

1. You are 65 or older and you sell your habitual residence (main home).

2. You have severe dependency or great dependency officially recognised and you sell your habitual residence.

3. You reinvest the full proceeds in a new habitual residence within a 2-year window.

4. You are over 65 and put the proceeds into a life annuity (renta vitalicia asegurada) within 6 months, up to €240,000.

These exemptions apply to IRPF only. Municipal capital gains tax (plusvalía municipal) and transaction costs follow different rules.

What taxes do you pay when selling property in Spain?

• IRPF (capital gains): taxes the difference between the sale price and the purchase price (plus eligible costs). You declare it in the tax return for the year of sale.

• Plusvalía municipal (IIVTNU): a local tax charged by the town hall, separate from IRPF. The exemptions in this article do not remove it.

• Other costs: notary, land registry, agent or gestor fees, and the prorated annual property tax (IBI).

If no exemption applies, the gain is taxed at the savings rates: 19% up to €6,000, 21% up to €50,000, 23% up to €200,000, 27% up to €300,000 and 28% above that. On a €100,000 gain, the tax bill can exceed €21,000, so planning before you sign at the notary matters.

1. Selling your main home if you are over 65

What the law says: Article 33.4.b of the IRPF Law exempts the capital gain from the sale of the habitual residence of taxpayers aged over 65.

Key points:

• There is no cap on the amount.

• You do not have to buy another home or reinvest anything.

• Age is measured at the date of sale.

• The property must be your habitual residence: continuous residence of at least 3 years, with exceptions for marriage, separation, job relocation, death and other justified causes.

• The Spanish Tax Agency treats a home as your habitual residence if it was one at any point up to 2 years before the sale.

• If a couple co-owns the property, the exemption applies per owner. If one spouse is 66 and the other 63, only the older spouse's share of the gain is exempt.

Common mistake: leaving the property empty or renting it out for more than two years before selling. It then loses habitual-residence status and the exemption is lost.

2. Severe dependency or great dependency

What the law says: The same exemption applies at any age if you have officially recognised severe dependency (grade II) or great dependency (grade III) under Law 39/2006.

Key points:

• You need the administrative resolution recognising your dependency grade.

• The same habitual-residence rules apply, with no cap on the amount.

• Keep the resolution with the deed in case the Tax Agency requests it.

3. Reinvestment in a new habitual residence

What the law says: Article 38.1 of the IRPF Law lets you exclude the gain from taxation if you reinvest the entire amount obtained in a new habitual residence.

Requirements:

• The property sold must be your habitual residence (3 years' residence, subject to the exceptions in the Regulations).

• The new home must be acquired within 2 years, counted from 2 years before to 2 years after the sale.

• You must state the reinvestment in the tax return for the year of sale.

How the numbers work:

• If you reinvest less than the proceeds, the exemption is proportional.

• If you still owed mortgage principal on the home you sold, that outstanding amount reduces what you need to reinvest.

• Reinvestment can be a purchase or a self-build, within the deadlines in the Regulations.

Tip: if you are 65 or older and it was your habitual residence, the over-65 exemption (point 1) is simpler because it does not require reinvestment.

4. Life annuity for over-65s

What the law says: Article 38.3 of the IRPF Law excludes the gain from selling any asset (a second home, a commercial unit, land) if you are over 65 and put the proceeds into a life annuity in your favour.

Requirements:

• A deadline of 6 months from the sale.

• A maximum of €240,000 invested in the annuity.

• The annuity must be arranged with an insurer, in your name, under the conditions set in the Regulations.

• If you invest less than the total proceeds, the exemption is proportional.

Example: a 70-year-old retiree sells a commercial unit with a €90,000 gain and puts all the proceeds, under €240,000, into a life annuity. The gain is exempt and they receive a regular income for life.

Comparison table

Are you a non-resident?

These exemptions are part of the IRPF regime for Spanish tax residents. Non-residents are taxed under the non-resident income tax (IRNR), generally at 19% on the gain for EU/EEA residents, and the buyer normally withholds 3% of the price on account. Different rules and reinvestment conditions apply, so get personalised advice before selling.

Mistakes that cost money

1. Selling a home that no longer qualifies as your habitual residence.

2. Confusing IRPF with plusvalía municipal: exemption from one does not remove the other.

3. Reinvesting late, or only part of the proceeds, and expecting the full exemption.

4. Forgetting to declare the exemption or reinvestment in your tax return.

5. Assuming the age exemption covers both spouses when one is under 65.

6. Applying resident rules when you are a non-resident.

Frequently asked questions

How long must I have lived in the home to qualify?
Normally 3 years of continuous residence. Exceptions exist for events such as marriage, separation, job relocation, unemployment or death.

Can I sell my main home after retiring and pay no IRPF?
Yes, if you are 65 or older and the property is your habitual residence (or was within the previous 2 years). You do not need to buy another one.

Does IRPF exemption mean I pay no plusvalía municipal?
No. Plusvalía municipal is a separate local tax and may still apply even when there is no IRPF.

Can I use the reinvestment exemption if I buy the new home before selling?
Yes, up to 2 years before the sale.

What if I sell a second home after 65?
The article 33.4.b exemption covers habitual residences only, but the article 38.3 life annuity route applies, up to €240,000.

What should I check before selling?
Your age or dependency grade, habitual-residence status, co-owners and available deadlines. You can check the Spanish Tax Agency website or consult a tax adviser.

Legal sources

• Law 35/2006 on IRPF, arts. 33.4.b and 38 (BOE).

• IRPF Regulations, arts. 41 and 41 bis.

• Law 39/2006 on Dependency.

• Spanish Tax Agency (Agencia Tributaria): income tax manuals and its guidance on the sale of a habitual residence by over-65s.

This article is for information only and is not personalised tax advice. Each case depends on its specific circumstances.