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HomeLatest NewsSelling or buying half of a home: how to terminate the condominium

Selling or buying half of a home: how to terminate the condominium

Date: March 21, 2023 Time: 17:28:36

There are times when the only way to be able to access the purchase of a property is as a couple (not as a sentimental relationship, but together with the financial support of another person who does not have to be our spouse; it may well be a relative or a friendly person). Acquiring a home in this way helps to distribute the costs of the entrance, the mortgage payment if necessary, those derived from the purchase and registration process… But, also, it can cause problems in the future if one of the parties decide provider.

These cases are not only seen in property purchases made in common, but also in inherited homes. After the acceptance of the inheritance, it is possible that one of the heirs and current owners wants to lose his part of the property. What to do in these cases? The procedure to follow is called extinction of condominium.

This process is regulated in articles 400 and 406 of the Civil Code and consists of the transfer of ownership of the property by one of the owners in favor of the other. It is a way, in short, to divide a co-ownership or community of goods.

When talking about transfer of property, it is understood that the owner who is transferring his part of the property receives a change in consideration, which is normally economic, but can also be of another type. It is for this reason that the extinction of a condominium has similar characteristics with a sale.

Condominium extinction with or without mortgage

Depending on the initial starting scenario to extinguish the condominium and that one of the owners keeps the part of the other, there are different ways to complete this acquisition. The first is if there was no mortgage, something that makes the process much easier as there is no debt with a third party. In this way, all you have to do is appraise the property, reach an agreement on the price to be paid by the party that transfers the property, and sign everything before a notary.

If there was a mortgage, the process was complicated. The first thing to do is request a novation of the mortgage loan, that is, a change in the conditions in which the mortgage was first designed, which implies reaching a new agreement between the parties and renegotiating the contract.

Once this step is resolved, the procedure will be the same: the agreed conditions and the contract will have to be signed before a notary and the two new deeds must be registered in the Registry, the one for the new mortgage and the extinction of the condominium.

What taxes must be paid in a condominium extinction

Carrying out a condominium extinction is associated with some expenses that will have to be assumed. The first is the Tax on Documented Legal Acts, which will be 1% of the value not of the property, but of the part that is acquired. That is, if the seller gives up 50% of a house that is worth 100,000 euros. the AJD will be 1% of 50,000 euros. This tax will have to be paid by whoever takes over the property of the party that gives up.

In a condominium extinction, it will not be necessary to pay the Property Transfer Tax and the seller, or whoever gives up their part of the property, will not have to pay the corresponding municipal capital gains either.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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