Tips for shared property ownership in Spain.

If you are thinking about buying a property in Spain with multiple investors, these are some things you should keep in mind. Spain has specific regulations governing co-ownership of properties by multiple owners.

Individual Tax Filing

In Spain, joint owners are required to file their tax returns separately. Each co-owner must report their share of the property and any associated income or expenses on their individual tax return. Non-residents have to file quarterly tax returns (one per property and per owner).

Clarifying Ownership Shares

When multiple individuals jointly own a property in Spain, it's crucial to establish and clarify the ownership shares. This determines each co-owner's rights, responsibilities, share of property income and expenses.

Right of Retraction

Co-owners in Spain have the legal right of retraction (derecho de retracto). If a joint owner sells their share to a third party, the other co-owners can challenge the transaction and acquire the asset by paying the same price and under the same terms and conditions.

Dissolution of Joint Ownership

Spanish law allows for the dissolution of joint ownership (extinción de condominio) through a special procedure called Division of Joint Property Ownership (DJPO). This enables one co-owner to buy out the others' shares, becoming the sole owner. The key advantage of DJPO is significant tax savings - the buyer only pays stamp duty (around 1.5% in most regions) instead of full purchase taxes (around 10%) and capital gains tax (3% for non-residents). In summary, Spain has specific regulations for joint property ownership, including separate tax filing, clarifying ownership shares, the right of retraction for co-owners, and a tax-efficient process (DJPO) for dissolving joint ownership.