What is condominium expiration?

Having a condominium means being a co-owner of an asset, that is, sharing ownership of the asset with other people.

The extinction of the condominium is regulated in the Civil Code as a procedure to divide the condominium. This procedure consists of a co-owner transferring ownership of it to the other co-owner or other co-owners, without the need for a consideration.

This procedure is very common in inheritance, couple separation or divorce situations. In the extinction of a condominium, complications usually arise due to the bad relationship between the co-owners, being even more accentuated if the parties are ex-partners, therefore it is necessary to go to the process assisted by a lawyer. At Audacia Abogados we help you solve your problem by asking for your consultation here.

How to carry out the extinction of a condominium? If one of the co-owners decides to dissolve the condominium, the rest cannot be denied, because the law states that no one can be forced to stay in a condominium, therefore each of the parties may request the division of the thing at any time common.

There are two types of procedures to dissolve the common thing, either by mutual agreement or through the courts.

-Extinction of the condominium by mutual agreement, it is carried out when the parties agree to any of the forms provided for the extinction of the condominium, such as through a sale. The co-owners who choose this option may grant a public deed of extinction of the condominium through a Notary Public, paying the corresponding tax.

In the event that the property is the family home of a married couple who wish to divorce or separate, the termination of the condominium must be considered in the regulatory agreement. If the regulatory agreement is approved by the Justice, it becomes, together with the sentence, the deed of extinction of the condominium, which will not pay the Tax of Documented Legal Acts.

-Extinction of condominium by judicial means. If the co-owners decide to go to court, they must file a lawsuit requesting the division of common property.

Taxation of the extinction of condominium.

The extinction of the condominium is not subject to the Onerous Asset Transfer Tax, but is exclusively taxed by the Tax on Documentary Legal Acts, the taxable base being the total value of the asset.

This operation is not considered a patrimonial transfer, and therefore it is not subject to the municipal capital gain, since the taxable event does not occur, its taxation will be postponed to the next transfer.

For the assumptions that there is an excess of adjudication for any of the parties in the extinction of the condominium, a patrimonial variation would occur in the person who receives the excess and therefore it should be declared in the personal income tax, under the same conditions as those derived of any other transfer of assets.

Extinction of condominium when there is a mortgage.

It is common for the termination of a condominium to fall on a home subject to a mortgage. If one co-owner transfers 100% of the home to the other, the co-owner who transfers would still remain as the debtor of the mortgage, even if he or she is no longer the owner of the home, therefore it is advisable to reach an agreement, through your lawyer, also with the bank, before executing the termination of the condominium.

The extinction of condominium is a procedure, in which various controversies usually arise with the other co-owner, therefore, they must be advised by a lawyer committed to their cause, you can contact Audacia Abogados, requesting your appointment here.