Spain updates mortgage guarantee limits and housing tax rules

The Spanish government has updated the income thresholds for the ICO Guarantee Line, a mechanism that allows buyers to access 100% mortgages by providing a public guarantee for up to 20% of the property price. As of June 19, the income limits are no longer uniform across Spain but vary by province to account for regional housing costs.

While the base limit remains 37,800 euros annually (4.5 times the IPREM), thresholds increase in high-demand areas. In provinces like Alicante, Valencia, or Zaragoza, the limit rises to 46,200 euros. In Álava, it reaches 54,600 euros, and in highly stressed markets such as Madrid, Barcelona, Málaga, and the Balearic Islands, the limit climbs to 63,000 euros. For couples, the combined income must not exceed double the specific provincial limit.

Separately, the Central Economic-Administrative Tribunal (TEAC) has clarified rules regarding tax exemptions for reinvesting proceeds from the sale of a primary residence. The tribunal ruled that the IRPF tax exemption applies only to the portion of the new property actually owned by the taxpayer. If an individual sells a home entirely and reinvests the funds into a new property shared with a partner, the exemption is limited to the specific share of ownership acquired, rather than the total amount of money reinvested.