There are many instances where owners of a property in Spain wish to divide the ownership ( a division of joint tenancy) and we can assist with this for properties all over Spain.
Cases of this might be:-
- a couple wishing to transfer the joint ownership of the property into one person´s sole name (perhaps due to divorce)
- business partners owning investment property where one wants to buy the other or others out
- members of a family that have inherited the property and wish to transfer the ownership to one member of the family
- two couples owning a property no longer wanting to co-own a property
We can use a special method for a division of ownership of a property in Spain, which saves taxes payable.
It is fully legal and the property is only subject to payment of Stamp Duty in Spain at the rate of 1.5% of the total taxable value of the property or the purchase price of the property (usually paid by the co-owner keeping the property) in the Valencia region, as opposed to paying the normal current 10% purchase tax and 3% retention being withheld for possible capital gains tax (13%) on the outgoing share.
NOTE – Following a Supreme Court Judgement in 2019, Stamp Duty is now only paid on the outgoing share. Not the whole value of the property.
What information do we need?
Initially, we would need firstly a copy of the deeds and a copy of the SUMA/IBI bill (council tax) scanned and emailed.
We also require each person´s copy passport and NIE certificate scanned and emailed to us.
Besides the cost of 1.5% Stamp Duty in the Valencia region; if there is a mortgage the Bank may have to agree, and they will have their fees for re-arranging the mortgage, which they advise directly. The client needs to supply the Bank with all the paperwork they require. Please contact us if you are in this situation before contacting the bank in order that we can give specific advice.
Costs
The client has to pay notary fees, land registry fees, stamp duty, and legal fees, as well as the bank´s fees if there is a mortgage. There will not be capital gains tax on these transactions.
After we have provided the breakdown of costs, the client sends an initial provision to our client account, and the balance will be required 10 days before completion (or the client may send it all at the beginning if preferred, as it is only held on account).
Process
Every owner has to either come for completion to La Zenia, or much easier, provide a power of attorney in favour of our lawyer so we can act for them. We prepare a draft power of attorney and email this to wherever the owners are, and they take it to a local Notary and sign, then it has to go to the foreign office or consulate for a Hague Apostille seal for international use. The Notary will arrange this and we provide clear instructions.
If owners live close to each other, then it saves costs by us preparing a joint power of attorney.
We calculate the transfer of ownership based on the official tax value and the owner keeping the property needs to show that they are paying the outgoing owner at the Notary. We can advise how to do this. Alternatively, the division of joint ownership can be justified by using a final divorce agreement.
The whole process generally takes a month to two months to complete, depending on circumstances.
After the property is transferred into the remaining owner´s sole name, we can also assist with calculation and payment of non-resident taxes each year, wherever the property is in Spain, plus we can arrange Spanish and UK Wills.
Please note that if a property is in one name only, we cannot do a division of tenancy in common, because the title is only in the name of one owner. Sometimes we can execute the divorce agreement and transfer the whole property to the spouse, but we cannot guarantee this method will be successful always (it has been accepted previously, but may not be again. Also the divorce agreement must be signed and stamped by the Courts and will a Hague Apostille). Please contact us for further information.
34 Comments
louise sims
Hello, would this be the same for a property in Nerja? Malaga province?