Notary María Cristina Buendía clarifies that the property retains its status as a primary residence even if the owner has been in a care home for years or has rented it out. The exemption from capital gains tax applies to those over 65 and cases of dependency.
The sale of the primary residence of an elderly person who has moved to a care home may be exempt from capital gains tax. This is explained by notary María Cristina Buendía, who in one of her recent publications addresses the case of those who need to sell the house of a relative who has been in a residential centre for years, as reported by marca.com.
The key is that the property can still retain its status as a primary residence for tax purposes. Buendía points out that this provision “affects those over 65 who have moved to a care home due to age.” The benefit remains even if a long time has passed since they stopped living there and even if the property has been rented out during that period.
“Even if several years have passed since they stopped living there, and even if the property has been rented out during that time, it can still retain its status as a primary residence for the purpose of applying the exemption from capital gains tax,” clarifies Buendía.
The notary also mentions other scenarios that allow for the exemption, such as cases of “severe dependency or high dependency,” as well as moving to the home of relatives up to the third degree, both by blood and by marriage.
Before putting the property up for sale, Buendía recommends reviewing each situation individually. She believes a “specific” analysis should be conducted to check how these considerations affect the particular case. The notary insists that this is a matter of “particular importance” before making the decision to sell.
For those interested, the exemption for reinvestment in a primary residence or due to age (over 65) is the usual way to avoid capital gains tax. In the case of the elderly moving to a care home, the key is to prove that the property maintains its status as a primary residence, something that, according to the notary, should be consulted with a tax advisor before formalising the transaction.
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