How to buy half of the house from your husband or wife?

If you are considering buying half of your home from your partner, you are probably going through a divorce.

Usually, this is the first issue addressed during a divorce: Who gets to keep the house? It's a complicated decision, so it's crucial to take several factors into account.

Important Aspects When Buying Your Partner's Share of the House

Your Economic Regime

If you are married under a community property system, you know that 50% of the house belongs to your spouse. Therefore, to obtain full ownership, you must buy their share. For those married under a separate property regime, ownership of the house does not have to be equally divided. For example, you might own 70% of the house while your spouse owns 30%, which means you need to purchase a smaller portion.

What Is the Value of the Property?

Ideally, both spouses should agree on the home's value, considering current market prices in the area. You can verify this by consulting real estate agencies or checking online platforms. If no agreement is reached, the best option would be to hire an appraiser to provide a neutral valuation.

What Happens If There Is a Mortgage on the Property?

If the home has an active mortgage in both names, it's logical that if you keep the property, your spouse will not want to remain listed as a mortgage debtor. In this case, you need to go to your bank and request a modification of the mortgage terms. This process incurs additional costs and may change some aspects of the loan. Banks may be hesitant to approve the modification due to security concerns or might require a guarantor.

Best Ways to Buy the Property from Your Spouse

Through a Donation

This may be the first idea that comes to mind, but it is the least advisable due to its high cost. In some Spanish regions, donations between parents and children receive a 99% tax benefit, but no such benefit exists between spouses. This means that as the recipient, you will need to pay both the Inheritance and Donations Tax (ISD) and the Personal Income Tax (IRPF).

Through a Purchase-Sale Agreement

The most common approach in these cases is to purchase your spouse’s share of the property through a formal sale agreement before a notary. In this document, your name, the share you are buying, and the purchase price will be recorded. Additionally, several costs must be covered:

• Taxes: The transaction is subject to VAT (IVA) or Property Transfer Tax (ITP), depending on whether the property is new or second-hand, as well as the AJD tax for notarized transactions. You might avoid the AJD tax by drafting a private agreement instead of notarizing it, but this is not recommended because private agreements:
• Cannot be registered in the Property Registry, which means you will be the sole legal owner without protection against third parties.
• Lack the security and legal assistance provided by a notary.
• Notary Fees: These vary based on the property price and notary rates but are generally similar across locations.
• Registry Fees: If the sale is formalized before a notary, you can access the Property Registry to officially record the transaction, ensuring you are the sole registered owner.
• Appraisal: If you require a professional appraisal, you must cover this expense.
• Mortgage Cancellation: If the bank allows a modification of the mortgage loan, the sale agreement will state that part of the purchase price will go toward paying off your spouse’s share of the mortgage debt.