Dissolution of Joint Property Ownership in Spain

[Lawbird Lawyer]

Dear Angela,

A Dissolution of Joint Property Ownership (DJPO, for short) is the best solution from a cost efficient angle as it's tax efficient. Any other solution implies paying more taxes to the Spanish taxman.

Your partner is a registered owner of 50% of the proeprty. Therefore under our laws he is entitled to 50% of the sale's proceeds regardless if he contributed or not to the property.

You have three options:

1. If you want to follow a DJPO he (or you) will have to pay 1% Stamp Duty on the full property value. You will of course have to pay him 50% of the value of the property as well as land registry, notary and legal fees.

2. If you want to buy him outright you will have to pay 7% Transfer tax. As well as all teh associated transfer expenses (land registry, notary and lawyer's fees). And of course you will have to pay him the 50%.

3. If he wants to "gift" you his 50% share you will attract Spain's Gift sliding tax scale which is the same for Inheritance Tax albeit with none of it's tax allowances meaning it's the most expensive option from a tax mitigation point of view. As he's only your partner (meaninmg you are not married) you are classified as being in Group IV which means you will pay dearly as there is no kinship.

I would recommend you follow option 1 which is why I wrote the article so foreigners were aware that you could wave paying 6% Transfer tax and pay instead only 1% tax.

If you are interested in hiring thsi service please contact us and we will explain further.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

[baz howard]

we want to sell our 50% share of our jointly owned house in spain but the other couple refuse to sell,how long and at what cost would it be to achieve the dissolution of joint ownership enforced by court ,thanks baz howard

[Lawbird Lawyer]

Dear Sir,

Through the law courts it would have a cost in the region of 6,000€.

Please contact us if you are interested.

Yours faithfully,

[Avril]

is there an upper limit on the transfer duty? My soon to be ex has agreed to give me the villa we jointly own in spain - the villa is probably valued at 1 million euros which means at 1% I would need to find 10,000 Euros plus the other fees which is a lot of money.

can you also advise how the property value is established - is it market value or the valor castral ? thanks

[Lawbird Lawyer]

Dear Madam,

Normally it's the value at which it was bought (the prior Title deed).

When you write that your ex has agreed to transfer you his 50% on the property is this as a result of divorce proceeds in the UK? Is there a UK ruling establishing he must hand you over this property?

Let me know if I can assist you in the transfer of your property.

Yours sincerely,
Raymundo LarraÃ*n Nesbitt

[Joe]

I'm buying a property in Spain from my father. What are taxes for a transaction of this type?

[Lawbird Lawyer]

Dear Joe,

I take it you do not hold a pre-existing share on your father's property. Otherwise you would only pay 1% Stamp Duty as per the article that starts off this very thread.

As I take for granted it's a resale you would have to pay the following:

Taxes

1. Transfer tax of 7% on the value of the property

Associated Expenses

1. Notary fees
2. Land registry fees
3. Lawyer's fees - usually 1% of the value of the property subject to a minimum legal fee which in our case is €1,300.

More details in our article:

Buying Property in Spain: An Overview - 3rd April 2000

Plase note the above article was written a decade ago, so all mention to taxes is outdated. Both the taxes and the concepts still remain the same but all mention to figures and percentages (even to Pesetas!) is outdated.

If you have further queries just ask them here.

I take the opportunity to offer you our Conveyance Service.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

[Nik]

Hello there. i and my wife own a spanish apartment, which is in both in our names, joint owners. i wish to transfer the property (my share in the ownership, of 50%) to my wife. Ive been told that to do this, it will cost in the region of 10,000 EUR. The property is worth around 650,000 EUR. I just find it hard to believe the costs of 10,000 EUR to simply transfer the name/ownership.
Please advise. Many thanks

[confused scot]

hi
My dad is a resisdent in spain and has sadly passed away his estate is too be shared with my sister also in scotland and my brother who lives in spain what taxes will we have to pay

[Lawbird Lawyer]

Dear Nik,

It sounds about right.

If we are talking of a contentious dissolution of joint property ownership it would be at least €10,000 as it involves litigation fees. In reality it will probabably be closer to €15,000.

If we are talking of a friendly dissolution of joined ownership for a property worth 650k the expenses and fees should be in the region of €10,000, yes.

Only Stamp Duty (AJD) is 1% on the full value of the property which in your case amounts to €6,500. To this you must add lawyer's, notary's and land registry fees which can easily account for a further €3,500 making a total of €10,000 in expenses and fees.

If you think 1% Stamp Duty levied on the €650,000 is expensive just think you are waiving Transfer tax at 7%.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt