Extinción de condominio

Operation by which a home with several owners becomes the property of just one, who compensates the others in money for their share. It is the usual way out after a divorce or an inheritance among siblings, when the property is indivisible and one of them wants to keep it. Its great advantage is fiscal: it is not a sale, so the person awarded the home does not pay ITP (10% in the Valencian Community) but only AJD (1.5%), a difference of thousands of euros. It requires a notarial deed and the agreement of all co-owners; the compensation must be in money and proportional to the value of the share acquired, because a badly structured excess award can be taxed as a gift or a transfer. If there is also a mortgage, the bank must agree to release the departing co-owner.