Advocats Abogados

Division of Joint Tenancy or Changing Joint Ownership in Spain

Real Estate - Fuente: Legal Solutuions - 14th March 2020
noticia destacada

From time to time we re­ceive an en­quiry ad­vising that someone is get­ting a di­vorce. One per­son is go­ing to re­tain the Span­ish apart­ment and the other the house in the UK, for ex­ample. There­fore they need to take one name off the Span­ish prop­erty and trans­fer own­er­ship to the other. So how do people go about this and how much would it cost?
Division of Joint Ownership

This is known as a dis­sol­u­tion of joint own­er­ship or di­vi­sion of joint ten­ancy. There is a method to deal with the trans­fer whereby the prop­erty is only sub­ject to pay­ment of Stamp Duty in Spain. In this re­gion this is at the rate of 1.5% on the out­go­ing share. This is paid by the co-owner keep­ing the prop­erty or agreed between the couple as part of the di­vorce. This is as op­posed to the nor­mal 10% buy­ing tax and 3% re­ten­tion be­ing with­held in this re­gion when a pur­chase/​sale.
Stamp Duty

Be­sides the cost of 1.5% Stamp Duty on the out­go­ing share, if there is a mort­gage the Bank has to agree. Of course, they will have their fees for re-ar­ran­ging the mort­gage, which they ad­vise dir­ectly. The cli­ents would need to sup­ply the Bank with all the pa­per­work they re­quire. However as Banks rarely agree now to take a name off a mort­gage. As they do not want to lose a guar­antor. Some­times it is best just to do a private con­tract between cus­tom­ers so that the out­go­ing party would be ab­solved of the mort­gage.

Costs on a Dissolution of Joint Ownership

Not­ary fees, land re­gistry fees, stamp duty, and legal fees have to be paid. (As well as the bank´s fees if there is a mort­gage). We can ad­vise the fees for mak­ing the change of the deed at the Not­ary. We need the deeds of the prop­erty and the local coun­cil tax bill for last year (SUMA in our area). Plus de­tails of the mort­gage if there is one.
Process of Change of Ownership

The pro­cess usu­ally takes about a month to six weeks. Really it de­pends whether all the in­form­a­tion is read­ily avail­able. And if cli­ents both would be com­ing to Spain or whether we would need pre­pare and send powers of at­tor­ney to them in the UK. We will also need a copy of any di­vorce agree­ment.

Some­times cli­ents say to us that on do­ing my re­search on this mat­ter they have come across a situ­ation. Whereby the per­son who is giv­ing up their half of the prop­erty has to prove that they have re­ceived mon­et­ary com­pens­a­tion from the per­son re­tain­ing the prop­erty. In many cases, someone does not re­ceive any ac­tual mon­et­ary com­pens­a­tion. But as part of the di­vorce set­tle­ment would be awar­ded the ex ‘s 50% share in the prop­erty in the UK or Ire­land.

So does this qual­ify for only pay­ing the 1.5% stamp duty in some areas rather than pay­ing as a more ex­pens­ive pur­chase and sale? The an­swer is yes. A copy of the di­vorce or sep­ar­a­tion agree­ment will suf­fice to jus­tify the stamp duty, so that is fine.

We can act all over Spain for this pro­cess. In the first in­stance, either the deeds and IBI can be scanned and emailed. Or cli­ents can send cop­ies by mail.

Then we can cal­cu­late costs and ad­vise them and the pro­cess for chan­ging the own­er­ship. Contact us if you are in­ter­ested in a di­vi­sion of jointly owned prop­erty and want to ask ques­tions or send us the deeds.