Question: I jointly own a property in Spain with somebody I no longer get on with. If I buy him out what tax would i have to pay on the transaction. What happens if he simply refuses to do anything (sell, buy me out or I buy him out).
Answer: The best option would be reach an agreement and to jointly sell or for one to buy the other one out. In Spain there is a special deed which is used to do this and allows the person acquiring the half to pay less tax than on a normal transfer. If you dissolve the joint ownership instead of the normal transfer tax of 8% of the half the person is acquiring you pay 1.5% of the total value of the property.
If your ex-partner does not agree to do anything then there is a special court procedure to deal with this situation which would result in the judge forcing a sale. Normally these cases get settled long before they finalise ,as soon as the other party realises that the procedure will inevitably end in the property being sold (and that he will have to pay the expenses derived from the the court procedure )
Our experience shows that as soon as the other party realises that we can indeed force the issue using the courts, they tend to agree to settle the case.
Typical scenario: A couple purchases a property in Spain in joint names. The relationship deteriorates. The economically weak partner will wish to sell and the other party claims that he/she will only pay a ridiculously low amount for the other half, and that he will not accept any different. The necessity of money sometimes leads the weak partner to accept an unreasonable settlement due to the urgency for money.
