If you own a property together with your partner in Spain and you separate, the property usually has to be allocated to one of you both.
During a divorce, a divorce covenant is generally drawn up. In this covenant, agreements are laid down about the allocation of the property in Spain, among other things. Tip: make a formal note of who pays the costs of the allocation!
With this covenant, the allocation must be registered with the Property Register in Spain. For this, both ex-partners have to sign a deed at the notary in Spain. Tip: both ex-partners can also give a power of attorney to our office so that we can settle this without them having to travel to Spain.
Regarding the costs for the allocation of the property in Spain, you should think about the costs for the notary, the Property Registry and the document tax. These costs vary by area in Spain and also depend on the value of the property.
For the document tax, it also matters whether you were married in community of property or not. If you were married in community of property, no document tax has to be paid. If you were not, the ex-partner who is allocated the house will pay document tax on the value of the share that is transferred.
When a property is allocated, no transfer tax is charged and also no profit tax or the so-called “plusvalía”, as there is no sale. After all, the part allocated to one of the ex-partners is not bought, but the other ex-partner will, if all goes well, be allocated another property as compensation. Tip: have this checked by a Spanish lawyer!
Also bear in mind that after the allocation, you may have to arrange practical matters such as converting utility contracts, debiting municipal taxes, cancelling bank accounts, etc.