[marionlucyg]

My partner and I own an apartment in Mallorca. We are not married. He would like to transfer his half share to me.  Please can you tell me what costs are involved.  Thank you.

[Anonymous]

If you’re tax resident in Spain I believe a liability for CGT for both parties arises on completion of the transfer, regardless of whether there is any monetary consideration involved – the Spanish taxman will use the deemed market value of the property as the basis of calculation of said liability.

[marionlucyg]

Thanks for your input, John.

We are non-resident. Does this make a difference ?

 

[tomar]

Hi.

If you own the apartment let’s say 50 -50 you can make a dissolution of the ownership.

This is different to make a sale or other transmission.

The difference are in the Taxes you gonna pay.

If he sales or gives his 50% to another 3rd person, then transmission tax (8 to 10%, depending of the value) has to be paid

But if you are dissolving a co-ownership you have to pay (Actos Jurídicos Documentados)  Stamp Duty Tax (1.2%) + plusvalía tax.

So, dissolving the co ownership is cheapest than another transmission.

Doesn’t matter if you are married or not.

 

Hope this helps: Toni M

 

[marionlucyg]

Thank you Toni,
Making a dissolution of the apartment is not something we have heard of. It seems to be a possible way forward so we will look into it further and hopefully come up with a resolution to our problem. Thank you.

[macgd016]

Hi Toni,

Your view on dissolving a co-ownership looks quite attractive but if no money changes hands wouldn’t the person taking full ownership have to pay Gift Tax on 50% of the value?

[tomar]

Happy to be useful

Regards

 

 

[tomar]

Dera Macgd016.. Of course money change hands. The one who will have 100 per cent ownership must pay the value of the other 50%. This is NOT a gift.

Price has to be paid (if not it’s a gift)  and if you make a gift you pay gift tax (tax deppends of the relationship, couple, father to soon, not relative   )

If you sale the 50% you pay sale tax (ITP) that’s 8% up to 10, depending of the value

If you dissolve you pay Stamp Dutty Tax (1,2%) BUT also you have to pay the value of the 50% 

if not will be considered as a gift so, tax authorities will claim you the gift taxes

 

On top of this is the one who “sells”, his 50% makes profit has to pay taxes for that.

 

 

 

[macgd016]

Hi Toni, Thank you for the clarification.

[Author]

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