In Spain, thousands of pensioners each year face unexpected consequences after selling real estate. At first glance, making a profit from a sale seems like a positive outcome. However, for those receiving the complemento a mínimos pension supplement, the situation can turn into an unpleasant surprise. The law strictly regulates who is eligible for this supplement, and any income above the established threshold may result in losing it.
Many people are unaware that even a one-off profit from the sale of an apartment or house is included in the annual income calculation. As a result, if the total gain exceeds the allowed limit, pensioners risk losing their regular financial support. Moreover, the age of the seller, even if over 65, does not matter to social security authorities.
Income and limitations
Spain’s minimum pension supplement system is based on the principle of need. The government only provides additional support to those whose total income does not exceed a certain level. This calculation includes not just pensions, but any other earnings—from wages and rent to interest on deposits and, importantly, profit from the sale of assets.
If a pensioner sells property and makes a profit, this amount is automatically added to their annual income. As soon as their total annual income exceeds the legal limit, they lose the right to the supplement. You can lose this support even over a single transaction, regardless of how many years have passed since the last one.
How profits are calculated
To determine whether the sale of an apartment will affect your benefits, it’s important to accurately calculate your so-called “ganancia patrimonial,” or capital gain. This is done by subtracting the purchase price and associated costs—such as taxes, notary fees, registration, and costs related to the sale like agency commissions or the municipal increase-in-value tax—from the total amount received from the sale.
If, after all deductions, there is a positive difference, this amount is considered profit and is included in your income calculation to determine eligibility for a supplement. If the sale does not yield a profit and instead results in a loss, your benefits remain unaffected.
Age is not a safeguard
Many retirees believe that after turning 65, the sale of their primary residence is tax-exempt and, therefore, does not affect their pension supplement. In practice, this is not the case. While income tax (IRPF) breaks do exist, social protection authorities focus on whether you made a profit, not on any tax exemptions.
Thus, even if no tax is due, the profit from the transaction will still be considered when assessing your eligibility for a pension supplement. If your annual income exceeds the limit, these payments will be suspended for at least a year—sometimes longer—until you once again meet the requirements.
When and how the supplement is suspended
The right to the supplement is not lost immediately after the transaction, but from the month following the one in which the income limit was exceeded. Pensioners are required to notify social services of any changes in their income within 30 days. Failure to do so may result in penalties or even demands to return overpaid amounts.
The supplement can only be reinstated after the annual income falls below the established threshold again. Each case is considered individually, and sometimes the process can take several months.
Who is eligible for the supplement
Only pensioners whose social security payments fall below the minimum level set by the state are entitled to the supplement. In addition, total family income and other sources of revenue are taken into account. Different income limits apply to various pension types—retirement, disability, or survivor pensions.
Legal residence in Spain remains a mandatory requirement. The amount of the supplement and the income threshold are revised annually, so it is important to monitor legislative changes and promptly report any financial changes.
If you weren’t aware, the supplement to the minimum pension (complemento a mínimos) is a special support measure in Spain for pensioners with low income. It is paid by Seguridad Social and is indexed annually. Recipients are required to inform the authorities about any changes in their income to avoid penalties and repayment of funds. If the income limit is exceeded, payments are suspended but can be reinstated once the requirements are met.
