DEED OF DISSOLUTION OF JOINT PROPERTY OWNERSHIP
A Deed of Dissolution of Joint Ownership allows you to transfer your share of the property in a tax efficient manner thus avoiding selling and having to pay the transfer tax of 8% (tax rate currently applicable in Murcia Region).
This situation applies to:
- Married couples getting divorce or partners who has split up.
- Friends who bought a property as joint-owners and no longer wish to own it together.
- Beneficiaries of an inheritance, who have effectively inherited a share in a property, who may decide to transfer it to another joint-owner.
There could be a situation where you need to sell the property and your co-owner refuses for some reason.
Dissolution of ownership can be enforced by law via aÂ court action to avoid the situation where the property is sold at public auction, with the inconvenience that in most of these cases there is a big loss as the price falls below market price. You need to contact your lawyer for advice as this approach should only be taken if there is no possibility of agreement. The most advisable way is to try to reach some sort of agreement through negotiation between both parties.
What are the costs involved?
The buyer of the share will be liable to pay 1.5% Stamp Duty Tax on the total property value on the deeds, Notary, Land Registry and solicitor fees.
The vendor will be liable to complete a Capital Gains Tax form on the percentage of the share (i.e. 50%) and to pay plusvalia tax (local capital gains tax on the value of the land). Non-residents are also subject to a 3% retention to be made by the purchasers. They will be entitled to a full refund of this retention if they have not made a gain on the transfer of the share.
This process can be arranged in a few days without any need for you to come over to Spain by granting your lawyer Power of Attorney.
Should you be involved in a divorce, just need to sell and recover your money or where legal advice is needed you should contact us.Dissolution Of Joint Property Ownership