A favorable interpretation of the concept of "main residence" allows the application of the personal income tax exemption to those who sold their house years after leaving it due to illness.
A recent ruling by the High Court of Justice (TSJ) of Catalonia (No. 574/2025, of February 18) has opened the door to applying the exemption from Personal Income Tax for the transfer of a main residence in cases where the taxpayer, over 65 years of age, had to leave his home many years ago for proven health reasons, and sold it some time later.
The case before the court involves a woman diagnosed with Alzheimer's disease and with a 78% disability, who left her home in 2007 to enter a care home for medical reasons and did not sell it until 2017. The tax authorities believed that, since she had not lived in the property for the two years prior to the sale, the profit (over €350,000) was subject to taxation. However, the court ruled that these types of forced relocations due to illness should be treated similarly to marital separations, annulments, or job transfers, which are already recognized by the Personal Income Tax Regulations as justified reasons for maintaining the status of a primary residence.
According to Article 33.4.b) of the Personal Income Tax Law and Article 41 bis of the Personal Income Tax Regulations, for a property to be considered the taxpayer's main residence at the time of its sale, it must have been their actual residence at that time or at some point during the two preceding years. However, there are exceptions for cases in which a change of address is justified by reasons such as marital separation, job relocation, or serious illness. The court understands that this two-year limit cannot be rigidly applied when the abandonment of the property is due to an illness requiring constant care, such as in the case of an elderly person with Alzheimer's disease.
In this regard, the High Court of Justice of Catalonia follows the doctrine of the Supreme Court, which in 2017 and 2023 had already admitted that the concept of "habitual residence" must be interpreted in a unified and fair way, also integrating situations in which the taxpayer has been forced to leave his home for justified medical or family reasons.
How does this ruling affect your income tax return?
The ruling represents a significant change that could benefit many elderly or dependent people who sold their homes years after having to leave them out of necessity.
If this applies to you or a family member, we encourage you to review your tax return and check if you are eligible for a refund of the income tax paid in error. Similarly, for future transfers, this interpretation may prevent taxation when the sale is due to a duly documented medical necessity.
You can contact this professional office for any questions or clarifications you may have.
Warm regards,
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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