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Selling Your Mallorca Home After 65: How the Over-65 Exemption Works
The over-65 exemption means that a Spanish tax resident aged 65 or older pays no capital gains tax when selling the home they have lived in for at least three years. It applies to the whole gain, with no cap and no obligation to reinvest.
For many of the owners we talk to in Santa Ponsa, Nova Santa Ponsa and the rest of Calvià, this is the single most valuable tax rule in Spain. A villa bought in the 1990s and sold today often carries a large paper gain, and the difference between paying tax on it and paying nothing is substantial. The catch is that the exemption has precise conditions, and a few of them catch people out. Here is how it works in practice.
Who Qualifies for the Over-65 Exemption
The rule sits in article 33.4.b of the Spanish income tax law (the Ley del IRPF). Three conditions have to be met at the moment of sale. First, you must be 65 or older on the date the deeds are signed. Second, you must be a Spanish tax resident, which in practice means you file a Spanish income tax return. Third, the property must be your vivienda habitual, your main home.
Spanish tax law defines a main home as one you have lived in continuously for at least three years. The regulations add a useful margin: the property still counts if it was your main home at any point in the two years before the sale. So if you have already moved out, for example to be closer to family, you have a window to sell without losing the exemption.
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Spain's courts have also clarified two situations that matter for older sellers. The Supreme Court ruled in May 2023 that a home does not lose its main-residence status when the owner has to leave it because of divorce or a similar circumstance, and Spanish tax specialists have applied that reasoning to owners who move into a care residence. A February 2025 ruling from the High Court of Catalonia followed the same line. The Supreme Court has also made clear that the three years must be spent living there as the owner; years spent in the house under a different arrangement do not count towards the three.
Couples and Joint Ownership
Most Mallorca homes are owned by a couple, and the exemption is personal. Each owner applies it to their own share. If one partner is 66 and the other is 62, only the older partner's half of the gain is exempt; the younger partner pays tax on their half in the normal way. Couples married under the Spanish community property regime (gananciales) need both spouses over 65 for the full gain to be exempt.
This makes timing worth a conversation. If the younger partner turns 65 in a few months, waiting until after that birthday before signing at the notary can remove tax on half the gain. Our guide to how ownership shares work in Mallorca explains how the deeds record each person's portion.
Selling the Bare Ownership and Staying On
The exemption also applies when an owner over 65 sells the bare ownership of their main home and keeps a lifetime right to live in it. This arrangement, known as nuda propiedad with a reserved usufructo, lets an owner release capital from the house without moving. We cover how that right works in our article on usufruct in Spain.
Second Homes and the 240,000 Euro Annuity Rule
A second home, a rental apartment or any other asset does not qualify for the main-home exemption. There is, however, a second rule for over-65s. Under article 38.3 of the same law, the gain on any asset is exempt if the seller puts the proceeds into an insured life annuity (renta vitalicia asegurada) within six months of the sale.
The ceiling is 240,000 euros per person, counted across all the annuities you set up over your lifetime. If you reinvest only part of the proceeds, only the matching proportion of the gain is exempt. When you take out the annuity, you must tell the insurer that the money comes from the sale of an asset, so that the contract is set up correctly for the exemption.
For a couple selling a holiday apartment jointly, that means up to 240,000 euros each. It is a narrower rule than the main-home exemption, but it can make a real difference on the sale of a long-held second property.
What Non-Residents Pay
This is where most misunderstandings arise. The over-65 exemption belongs to Spanish income tax, which only applies to Spanish tax residents. Owners who live abroad pay non-resident income tax instead, and the exemption does not exist there. Spain's tax authority confirmed this in a binding ruling (V2530-25) dated 18 December 2025, which dealt with a seller over 65 who had moved to France.
Non-residents who live in the EU or the European Economic Area can still avoid tax on the gain from selling what was their main home, but only by reinvesting the full proceeds in a new main residence. Without reinvestment, the gain is taxed at the non-resident rate. The buyer also withholds 3 percent of the price and pays it to the tax authority on the seller's account, which is then set against the final bill. Our article on capital gains tax when you sell covers the standard calculation.
What the Exemption Does Not Cover
The over-65 exemption removes national income tax on the gain. It does not touch the municipal plusvalía, a separate local tax on the increase in land value that the town hall charges on every sale. In Calvià, that bill arrives regardless of the seller's age. We explain how it is calculated in our guide to the plusvalía tax.
Agent fees, notary costs for the seller's part of the deed and the cancellation of any remaining mortgage are also unaffected. And the gain still has to be declared: an exempt sale appears on your income tax return for the year, even though no tax is due on it.
Practical Steps Before You Sell
Start by confirming your tax residence and the date you moved into the house; the padrón certificate and utility bills are the simplest evidence of three years' residence. Check the ownership split on your deeds, and both owners' dates of birth, before agreeing a completion date. If a second home is involved, speak to an insurer about the annuity well before the sale, so the six-month deadline is not a rush.
A clear idea of value helps with all of this. Our article on how property valuation works in Mallorca sets out how asking prices are reached, and you can request a free valuation of your home through our valuation form. The detailed rules are published by the Agencia Tributaria, and an independent tax adviser should confirm how they apply to your own situation.
If you are thinking about selling in Santa Ponsa or anywhere in southwest Mallorca, call us on +34 971 692 434, message us on WhatsApp or email help@imperial-properties.com. You can also browse our properties across Mallorca.
