If you’ve mutually agreed to call time on your marriage, the chances are you’ll be entering legal proceedings to decide what to do with your assets.
These are financial assets that you’ve no doubt accumulated together. It’s therefore important that you both get your fair share of the proceeds. This includes everything from savings and pensions to property, both at home and abroad.
Is the holiday home jointly owned?
During a divorce settlement, there is no fixed formula for dividing property assets. The process depends on whether both parties have equal rights to the property and should take into account the needs of each spouse, as well as any children from the marriage. If you own a holiday home in Spain that has been used for family vacations or rental income, this property should also be included in the settlement.
To begin, it’s important to know whether the property is jointly owned. If both your names are on the property’s deeds, it is typically considered joint ownership. In this case, it generally doesn’t matter who contributed more financially or who uses it more, courts often view the asset as being 50/50-owned, unless an agreement like a deed of trust or cohabitation agreement states otherwise.
If only one of you is named on the Spanish Land Registry, the situation becomes more complex. While having one name on the title doesn’t automatically mean sole ownership, it can complicate claims during divorce. In such cases, it’s essential to seek advice from a divorce solicitor with expertise in international property law to understand your rights and options.
The options at your disposal
Fortunately, if the asset is viewed as a 50/50-owned property, you’ve got plenty of options. Firstly, you can look to sell the asset now and share the proceeds of the sale, once taxes and legal fees are taken care of. This may be your best bet if you want to cut ties permanently.
Alternatively, one of you may prefer to retain the asset outright. In which case, the individual wishing to retain the property would need to buy the other out at a fair market value.
Finally, you may opt to continue co-owning the asset, potentially using the property on a rota basis. This works best if you still get along well and you’re still both firmly in love with the Spanish way of life.
Sorry, you need to consider the tax and legal implications too
If you decide to sell your Spanish holiday home, you need to do the right thing with your sale proceeds. In Spain, capital gains tax is likely to be due if you’ve made a profit. It may even be owed in the UK by HM Revenue and Customs too, depending on your own tax situations.
Spaniards are also charged a ‘plusvalia tax’, which is an additional tax on the rise in land value. Don’t forget the other costs incurred too, like legal and notary fees, as well as possible early repayment charges if it’s mortgaged.
It’s always a shame having to divide up a holiday home, especially one in the beautiful country of Spain. But it’s not an impossible task. Try your best to keep things amicable, seek experienced legal help and reach an agreement that’s fair for all parties.
Check out related info on this article, including:
- The top family-friendly activities on the island of Tenerife.
- Learn more about Spain’s Plusvalia Tax.
Please note this is a collaboration.
