Being over 65 years of age has an advantage in the 2023-2024 income campaign, since this group has the right to certain reductions and exemptions in the full state quota and deductions that vary depending on the autonomous community in which they reside. The list of tax benefits is extensive and knowing them can significantly reduce your bill with the Tax Agency.
Income and capital gains exempt from taxation, an increase in the personal minimum due to age, as well as deductions for renting a primary residence, disability or for being enrolled in a gym are part of the list of the most notable tax benefits that older people can take advantage of to pay less in the personal income tax return.
The income tax return of taxpayers aged 65 or over is generally governed by "the same criteria" that apply to the rest, explains Carme Ferrer, tax advisor and partner at Ros Petit. That is why they will have the obligation to present the declaration if they receive income from work - which includes the retirement pension - from 22,000 euros per year or exceed 15,000 euros if they have two or more payers and from the second onwards. have received 1,500 euros or more.
Taxpayers in this group can apply in their returns, provided they meet certain requirements, the following tax exemptions: financial benefits for hosting people with disabilities or people over 65 years of age, financial aid granted by public institutions to people with disabilities with a degree equal to or greater than 65% or those over 65 years of age to finance their stay in residences or day centers. Likewise, public benefits linked to the service are exempt, for care in the family environment and personalized assistance, "which derive from the Law on the promotion of personal autonomy and care for people in a situation of dependency", detailed from the Cabinet. of Studies of the Spanish Association of Tax Advisors (AEDAF).
One of the most significant exemptions that this group enjoys is that they do not have to pay taxes on capital gains derived from the transfer of their habitual residence. The exemption "will also apply if bare ownership is transferred and usufruct for life is reserved," Ferrer clarifies. However, if the real estate "was acquired by the community property and only one of the spouses is 65 or older, the exemption will only apply to half of the benefit obtained," clarifies Rubén Gimeno, technical secretary of the Registry of Economists. Tax Advisors (REAF).
Likewise, the capital gain obtained from the transfer of any asset element - for example, real estate other than the habitual residence, shares or rights - will be exempt from taxation if the amount obtained in the transfer is reinvested, within a period of 6 months, in the constitution of a life annuity in his favor. The maximum amount that can be allocated to this savings product will be 240,000 euros.
Furthermore, the life annuity "must have a periodicity of less than or equal to one year, begin to be collected within a period of one year from its constitution, and the annual amount of the income may not decrease by more than 5% with respect to the previous year." , comment from AEDAF. Added to this is that the taxpayer must inform the insurance company that the life annuity contracted constitutes the reinvestment of the amount obtained from the transfer of his or her assets.
One of the formulas to cover economic needs during the stage of old age is to resort to a reverse mortgage, a loan or credit guaranteed by a mortgage loan on real estate that constitutes the habitual residence of the applicant, who must be 65 years or older. . The additional income obtained by the taxpayer after contracting this type of loan will not be taxed in personal income tax if certain requirements are met, such as that "the debt is only payable by the creditor and the guarantee is executable when the borrower dies or, if so is stipulated in the contract, when the last of the beneficiaries dies," explains Gimeno.
The taxpayer's minimum is the part of the annual income obtained that is not taxed because the Tax Agency considers that it is used to satisfy basic personal and family needs. "It is obtained by adding the minimums per taxpayer, descendants, ascendants and disability," explains Ferrer.
The taxpayer's minimum is, in general, 5,550 euros per year, although, depending on age, it increases by the following amounts: for those over 65 years of age, by 1,150 euros, and for those over 75 years of age. years, at 1,400 euros. In some autonomous communities - Andalusia, Balearic Islands, Galicia, Madrid and the Valencian Community - these amounts are higher.
In the case of joint declaration of family units, the other taxpayer does not give the right to the application of the taxpayer's minimum, but the increase in the other spouse's taxpayer's minimum is computable, if their age is greater than 65 or 75 years.
Some autonomous communities have specific deductions in the income tax return for those over 65 years of age. These are the most notable:
Deduction of 75 euros for each taxpayer who is 70 years old or older and obtains income to be included in the general tax base and is not exclusively from capital. However, the amount resulting from the sum of the general tax base and the savings tax base (boxes 0435 and 0460) cannot exceed 23,000 euros in an individual return or 35,000 euros in a joint return.
Deduction of 360 euros for each taxpayer with a degree of disability equal to or greater than 33% and 144 euros for each taxpayer over 65 years of age. These two amounts are compatible with each other. The amount resulting from the sum of the general tax base and the savings tax base (boxes 0435 and 0460) cannot exceed 42,900 euros in individual taxation or 57,200 euros in joint taxation.
Deduction of 10% of the amounts paid for the rental of the habitual residence, a deduction that the owner of the rental contract can apply in his declaration. The maximum amount is 300 euros per year in individual taxation or 600 euros per year in joint taxation.
You must be 65 years of age or older and the sum of the general taxable base and the taxable savings base, reduced by the personal and family minimum, must be less than 22,946 euros in individual taxation or 31,485 euros in joint taxation. Furthermore, the amounts paid for rent must exceed 10% of the taxpayer's income and must be justified with an invoice and proof of payment. "Cash payments are not valid," they clarify from AEDAF.
Deduction of 150 euros for taxpayers over 75 years of age. The taxpayer will not be able to apply this deduction if he is over 75 years old and resides for more than 30 calendar days a year in residential centers for the elderly of the Castilla-La Mancha Community Board or in places arranged or subsidized by it in other centers. with the exception of temporary stays resulting from convalescence duly accredited by the Health Service of the autonomous community.
Another aspect to take into account is that the amount resulting from the sum of the general tax base and the taxpayer's savings cannot be higher than 27,000 euros in individual taxation or 36,000 euros in joint taxation. In cases in which the person over 75 years of age has an accredited degree of disability equal to or greater than 65%, the taxpayer's disability deduction will be applied.
Deduction of 300 euros for each taxpayer aged 65 or older, with a degree of disability equal to or greater than 33%. And 656 euros for each taxpayer, with an age equal to or greater than 65 years, with a degree of disability equal to or greater than 65%.
The amount resulting from the sum of the general tax base and the tax base of the taxpayer's savings less the personal and family minimum (boxes 0435, 0460 and 0520) cannot exceed 18,900 euros in individual taxation or 31,500 euros in joint taxation. Furthermore, it only applies in cases in which the taxpayer was not a user of public or subsidized residences in the community of Castilla y León during the fiscal year.
Deduction of 10% of the amounts paid in 2023 for the rent of the habitual residence of the widowed taxpayer aged 65 or over. The maximum amount of the deduction would be 300 euros. The amount resulting from the sum of the general tax bases and the taxpayer's savings less the personal and family minimum cannot exceed 20,000 euros in individual taxation or 30,000 euros in joint taxation.
It must be remembered, adds tax advisor Carme Ferrer, "that those tax resident taxpayers in Catalonia who have been widowed in 2021, 2022 and 2023 can apply a deduction in the annual personal income tax return that amounts to 150 euros in general and 300 euros in general. "the assumption that the taxpayer is responsible for one or more descendants who give the right to apply the minimum for descendants."
Deduction of 10% of the amounts paid to third parties by taxpayers who are 65 years old or older and affected by a disability equal to or greater than 65% and who, in addition, require help from third parties. The maximum limit of the deduction is 600 euros.
The amount resulting from the sum of the general tax bases and the savings minus the amount of the personal and family minimums cannot exceed 22,000 euros in individual taxation or 31,000 euros in joint taxation. "In addition, the taxpayer in 2023 must not have been a user of public or subsidized residences in the autonomous community of Galicia or a beneficiary of the assistance check from the Xunta de Galicia," they recall from AEDAF.
Deduction of 100% of the expenses of taxpayers over 65 years of age in 2023, with a limit of 300 euros per year, in relation to the following physical exercise and sports practice services carried out in the community: those provided by gyms and sports facilities , by entities registered in the La Rioja Sports Registry, in classes for the practice of sport or physical education, as well as by a Rioja federation. "They can be activities carried out by the taxpayer, his or her spouse and those people who give the right to the application of family minimums for descendants and ascendants. The amounts paid must be justified with the relevant invoice," the association of tax advisors clarifies.
The Valencian Community applies a similar deduction, specifically 50% if the declarant is over 65 years old and 100% if the declarant is over 75 years old. The maximum limit of the deduction for practicing sports and healthy activities will be 150 euros.
Another notable deduction that is applied in the community is 197 euros for each taxpayer with a disability equal to or greater than 33% and age equal to or greater than 65 years. The amount resulting from the sum of the general taxable base and the savings taxable base may not exceed 30,000 euros in an individual return or 47,000 euros in a joint return. This deduction cannot be applied to the taxpayer who obtains a benefit in 2023 that was exempt in the 2023 personal income tax. Likewise, it is subject to specific limits.
Deduction of 15% of the amounts paid for the rental of a habitual residence in the territory of the Balearic Islands in the case of taxpayers who, as of December 31, 2023, were over 65 years of age and did not carry out any work or professional activity. The maximum amount of the deduction will be 530 euros.
The taxpayer may not have the right in the 2023 declaration to apply any deduction for investment in primary residence. Likewise, the amount resulting from the sum of the general tax base and the savings tax base cannot exceed 33,000 euros in individual taxation or 52,800 euros in joint taxation.
