When two people share an apartment and because they bought in pairs, by inheritance, or for any other reason— there may come a time in which one of them you want to keep 100 % of the property.
The majority believes that “you have to buy the 50 % of the other”, and therefore pay the 6-10 % of ITPas in any sale.
But this it is not so.
There is an alternative completely legal, collection in our legislation civil, call extinction of condominiumthat completely changes the cost of taxation of the operation.
What is the extinction of the condominium? (explained easy)
It is an operation by which one of the owners happens to be the holder of 100% of the propertywhile it compensates financially to the other.
Works in divorces, separations, inheritance with a number of brothers, property in co-ownership between partners, etc
IMPORTANT:
Yes, the person who stays the housing you have to pay the other 50 %just like a sale.
The difference is how renders this operationand there is where the big savings.
Why pay a lot less than a sale of a home?
1. A sale classic
Buy 50% of the other for € 200,000 pay:
- ITP in Madrid (6 %): 12.000 €
- ITP in Barcelona (10 %): 20.000 €
2. In a termination of condominium
There is not ITP.
You only pay Stamp duty (stamp duty):
- Madrid: 0,75 % → 1.500 €
- Barcelona: 1,5 % → 3.000 €
💡 Real savings: between 10,500 and 17,000 €, just by using the correct figure.
The reason is simple: the law considers that you are not purchasing a new home, but rearranging the property of something that was already yours.
Who can use this figure?
It is valid when:
- There are several owners in the same building.
- One wants to stay with the 100 % and compensate economically to the other.
- The housing is not physically divisible.
It is used especially in:
- Divorce or breakups
- Inheritance with a number of brothers
- Separation of partners with real estate in joint tenancy
- Couples that bought them together and then they want to separate their assets
What the bank can finance it? Yes, and it's often easier to
Another advantage very unknown:
In a termination of the condominium, the bank may to finance 100 % of the value you paid to otherbecause the mortgage guarantee happens to be the 100 % of the property.
In a sale, normal, the bank only finances a 70-80 % of the purchase value.
What about when you can use the extinction of the condominium?
The extinction of the condo allows you to:
- Awarded 100% of the housing
- Avoid ITP of 6-10 %
- Only pay stamp duty on the 0,75-1,5 %
- Save between 10,000 and €20,000
- Access to more flexible funding
But beware: it is not always neutral fiscally
Here comes the part that many overlook.
The final treatment depends on numerous factors:
- Income TAX (there can be gain if it compensates for more than due)
- Surplus city
- Over-allocation
- How to split the mortgage
- Actual value of the property
- The marriage (marital or separate property)
- Type of housing
- Rules of each Autonomous Community (the hairpins of the stamp duty change)
A single detail miscalculated can convert the operation to a sale covertly and turn the ITP full.
For example:
- Valuing the wrong house
- Make an inadequate compensation
- Write incorrectly writing
- Not properly justify the award
Why vary the tax among the autonomous communities?
Because:
- The type of stamp duty what sets each AUTONOMOUS community
- Some offer reduced rates according to:
- Age
- Large family
- Disabled
- Type of housing
- Value of the property
- Can also be applied bonuses in plusvalia municipal or reductions in certain cases family members
That's why there is a “rule of thumb”: Each case must be analyzed with a magnifying glass.
Conclusion: it is a very advantageous, but it must be done with precision
The award of 100 % of the home by dissolution of co-ownership:
✔️ you can save 10,000 and 20,000 €
✔️ it is totally legal
✔️ it is common in divorces and inheritances
✔️ allows for favorable financing
✖️ but if you do it wrong, you can generate tax unexpected
Do you want to know if your case is viable and what would be your real savings?
In IURIT we analyze:
- Your family's case (divorce, separation and inheritance)
- The valuation of the building
- How it affects the mortgage
- Risk of personal income TAX, capital gain or excess of award
- The tax rate of your Autonomous Community
- The wording of the correct writing
Write to us at info@iuritcorp.com or request a consultation with our team.
We'll help you keep your home by paying just enough, not more.
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