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Property in Spain: What happens when there’s a divorce?

It's something of a nightmare scenario but one that happens to a lot of married couples. You've bought a property together, perhaps have a mortgage, but now you're getting divorced -- what happens next?

Published: 13 October 2023 14:53 CEST
Property in Spain: What happens when there’s a divorce?
Making an extinción de condominio with an agreement for tax purposes is one of the most common arrangements for divorcing couples who co-own a property together in Spain. Photo: nhanhmaimoi/Pixabay.

It’s far from ideal but something that unfortunately happens to many married couples: a divorce.

Of course, divorces can be complicated by all sorts of different things. Is it amicable? Do you have children? Did you sign a prenup? And, of course, do you have property together?

READ ALSO: What you need to know about getting a prenup in Spain

Property in particular — who owns it, who is legally entitled to it, who will keep it, who takes on the mortgage — can cause friction in what is often an already tense time in many people’s lives.

So, what are the rules, and what happens to property in Spain when there’s a divorce?

What happens to property when there’s a divorce in Spain?

The short answer is, it depends.

In the simplest scenario where there are no children and the spouses each own equal shares of the property, there may be an agreement to sell the property and divide the proceeds equally.

What happens to the mortgage?

Maybe you’ve got a mortgage. Maybe it’s shared, maybe it’s in one person’s name. So what happens to it in the case of a divorce?

Technically speaking, if the loan agreement is signed under both names then both people should continue to pay the monthly fees and the financial institution may claim the payment from both holders. Josep Vera, director of business development of Hipotecas.com, told El Economista that “the people who appear on the loan and own the home will continue to maintain their obligations whether they are married or divorced.”

In simple terms, the people who signed up to the mortgage contract and appear as debtors on the loan agreement must pay it, regardless of whether they are married, divorced, or in the process of getting divorced.

However, it’s not exactly that simple, and there are legal options to work around this. In this case, both spouses can agree on the distribution of assets and decide who keeps the mortgage. If one person assumes the loan, you may be best served to ask the bank for a mortgage restructure. However, note that some banks may reconsider the terms of the mortgage offer depending on the different financial positions of each party and how the change in contract could potentially affect the repayment of the loan.

What about the kids?

If you have kids, they can also play a role in property division.

Put simply, child custody (and who has it) directly affects the use of the house and the mortgage. As a general rule, in Spain children stay in the family home with the parent who has been granted legal custody, although the payment of the mortgage, in these cases, will be borne by the owner whether or not he resides in the house or has custody or not.

So, in theory, you could be the mortgage owner but if you don’t have custody of your children, you will be paying the mortgage on a property you don’t live in.

READ ALSO: Civil union or marriage in Spain: which one is better?

Extinción de condominio

Another option and something fairly common in Spain when it comes to property and divorce disputes (and in shared properties more generally) is an extinción de condominio. We can translate this roughly as liquidation or dissolution of co-ownership, although it is sometimes referred to a dissolution of joint property ownership.

What is an extinción de condominio?

An extinción de condominio essentially means liquidating the common ownership of a property. There are generally two ways to do it: through an amicable agreement or through a legal procedure that leads to the forced sale of the property.

With an agreement

One of the possible solutions is an extinción de condominio with an agreement if one party decides they want to sell their part and is financially compensated by the other.

For example, if your ex-partner wants to keep the property and you don’t, one possibility is the transfer of your part to them in exchange for the financial equivalent. This is one of the simplest ways to do it.

Of course, you could also decide to sell the property and split the profit between you.

Without agreement

This is where things can potentially get a bit messy. An extinción de condominio without a prior agreement likely means a legal dispute and auctioning of the property in front of a judge.

Spanish legal experts recommend that it is always better to reach an agreement before it gets to this point. This is basically when one party does not agree and legal proceedings for an forced dissolution of ownership begin.

Tax benefits

However, there are some potential tax benefits of getting an extinción de condominio. Although one of the co-owners “acquires” the part of the other, from a tax point of view this is not taxed as “a sale” in the way a typical property purchase would be.

Whereas property sales can be taxed at roughly 6-10 percent, depending on the region, an extinción de condominio is only taxed at 0.5-1.5 percent (again depending on the region).

Making an extinción de condominio with an agreement for tax purposes is one of the most common arrangements for divorcing couples who co-own a property together in Spain.

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PROPERTY

Too hot or too cold: Spain’s homes struggle to keep comfortable temperatures

Amid rising temperatures and more extreme weather, new data reveals that a significant proportion of Spaniards are struggling to keep their homes at comfortable temperatures during the winter and summer months.

Published: 14 May 2024 09:51 CEST
Too hot or too cold: Spain's homes struggle to keep comfortable temperatures

Spaniards are increasingly finding it difficult to keep their houses at comfortable temperatures during the summers and winters, and the problem has grown markedly over the last decade.

This follows new data released from Living Conditions Survey recently published by Spain’s National Statistics Institute (INE), which revealed that over a quarter of families in Spain struggle to heat their homes sufficiently in winter and that a third are too hot in summer.

The percentage of households reporting difficulties in keeping their homes at a comfortable temperature has increased by almost ten percent overall in the last decade.

READ ALSO: Why are Spanish homes so cold?

In the colder months, the proportion that say they can’t keep their property sufficiently warm during winter has grown from 17.9 percent in 2012 to 27.5 percent in 2023.

The summer heat poses an even greater problem for Spaniards. The percentage of households struggling to keep their homes cool enough during the summer months has risen from a quarter (24.8 percent) to over a third (33.6).

READ ALSO: Ten ways to protect your Spanish property against the summer heat

This comes as Spain faces record breaking temperatures year round and rising energy costs. According to Spain’s State Meteorological Agency (Aemet), 2023 was the third hottest summer since records began, surpassed only by 2022 and 2003.

In summer 2023 alone, four official heat waves were recorded, lasting a total of 24 days.

READ ALSO: How the right orientation of your Spanish home can save you hundreds on energy bills

However, though rising temperatures clearly play a role, so too does geography, income, and poor energy efficiency caused by poor insulation.

Murcia is the region where the highest proportion of households have problems keeping their homes cool in the summer, with almost half of families polled saying they are in this situation (46.6 percent). Murcia was followed by Madrid, Andalusia, Catalonia, Aragón and Extremadura, where the figure is 36 percent.

At the other extreme, in the cooler, northern regions of Asturias, Cantabria and Galicia, it is not even 20 percent.

Despite that, it is also the southern regions that struggle the most with keeping their houses warm enough during the winter. Murcia is once again the region where the highest percentage of families are unable to keep their homes at an adequate temperature over the colder months.

40.1 percent of Murcianos say they find it difficult to heat their homes over winter. In Andalusia and Extremadura the figure is almost 35 percent, the other two regions that top the list, meaning the three most southern regions of Spain came out on top.

In contrast, in Navarre, Castilla y León​​, and the Basque Country, less than a fifth (20 percent) of households report problems maintaining a sufficiently warm temperature at home during winter.

Household income also factors into this problem. INE data shows that the proportion of households struggling to maintain an adequate temperature in their homes increases as average income decreases. Among families with the lowest income levels, 38.9 percent say that they are cold in winter and 41.3 percent say that they are too hot in summer.

Of the regions that struggle to keep their homes warm or cool enough, Murcia, Andalusia and Extremadura all have some of the lowest median per capita incomes in the whole country, along with some of the highest levels of poverty.

Equally, the parts of the country where this seems to be less of a problem, such as the Basque Country, Galicia, and Navarre, are some of the wealthiest regions of Spain.

Housing quality and insulation also contribute to poor energy efficiency, which in turn makes temperature control more difficult. Even among households with high incomes, 15 percent say that they are unable to heat their property sufficiently in winter and 24.8 percent struggle to keep it cool enough in summer.

According to INE data, a quarter (25.1 percent) of Spanish households have not made any improvements to their thermal insulation or heating system in the last year, significantly more than the 14.1 percent who have been able to make changes.

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