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hi , i have a small apartment in casares costa which I purchased 3 years ago with my wife.I have now divorced and are considering my future . We have a mortgage on the property which she has been living in and paying the mortgage and all the utilities for the past year.I need to take my name off the mortgage and sign all the equity over to my ex , please can you advise me what the proceedure entails and if there is a cost involved . I need to adress this asap .
Please reply asap, many thanks
Hello Mr. Clarke,
The best option is to sign a deed of dissolution of co-onwership at the Notary office to transfer the property over your your ex-wife. Prior to this you need to contact the bank to advise them that you will no longer be the owner of the property following a divorce procedure and that you therefore need to have the mortgage discharged.
If the divorce settlement specifically mentions the property in Spain you then stand a better chance to get the mortgage discharged as banks dont like to lose guarantors to a mortgage loan.
In summary, you will need to obtain confirmation from the bank, arrange for the legalities to be signed at the Notary Office following all legal procedures and register the property in your ex-wife´s name.
The costs for this are typically 1% for Stamp Duty (on the registered value of the property), legal fees at 1% (which should also include dealing with the bank and changing the utilities to the remaining owner,as well as changing Town Hall records) and notary/land registry fees, aproximately 1.500 Euros both.
If you need further help please advise.
Dear Sir,
As my colleague has already pointed out, a legal process known as a Dissolution of Joint Property Ownership (DJPO) would be the most efficient solution from a tax mitigation point of view.
However I must stress that this is not simply removing your name and placing hers this is a full conveyance procedure only that she will pay less taxes following a DJPO. Instead of paying 7% Transfer Tax on the full property value she will waive 6% and pay instead 1% Stamp Duty on the full property value.
Please read our article on Dissolution of Joint Property Ownership in Spain.
We already have a thread opened on this matter if you wish to peruse it.
If you require a sample breakdown of fees and expenses to have a rough idea on what it would cost, please contact us requesting it.