The Disappearance of Joint Ownership: A 2024 Guide - Everything You Need to Know

There are many cases where two or more people can co-own the same property, which is very common in the housing world. The most common situations are inheritance (joint ownership among several siblings) or divorces (property acquired by both during the marriage). In these cases, terminating the joint ownership allows for the cessation of the existing joint ownership arrangement. Although it is best to dissolve joint ownership amicably, conflicts may arise if one or more owners want to sell while the other party opposes it.

To avoid this blockage, there is a legal tool: the division of joint property. In this article, we will tell you everything you need to know about terminating joint ownership in 2024: what it means, what types of joint ownership termination exist, what expenses and taxes are associated with it, what the cost of this operation is, and what happens in the case of a mortgage...

What is the termination of shared ownership?

The termination of shared ownership involves the cessation of joint ownership of a particular property. There are two ways to do this: through a friendly agreement or through a specific legal procedure (division of common property), which will lead to the forced sale of the property (auction). We talk about shared ownership when indivisible property has multiple owners: there are similar concepts with the same meaning that you can find in legislation and legal documents: joint ownership, homeowners' association, belonging to the second...

In what cases can the termination of shared ownership occur?

If one or more owners did not want to continue participating in the community and the property is indivisible, and therefore cannot be divided among the parties (for example, an apartment).

Reasons for the termination of shared ownership

The most common cases of termination of shared ownership occur in situations such as inheritance (termination of shared ownership between siblings) and divorces. The legal action used to implement the termination of shared ownership is the division of joint property, although it would be ideal to try to reach an amicable agreement outside of court.

Consequences of terminating shared ownership

The legal basis for the division of common property is found in Article 400 of the Civil Code, which states that "no co-owner shall be obliged to remain in the community" and that "each of them may demand the division of common property at any time."

Termination of joint ownership by agreement

One possible solution is to terminate the shared ownership with compensation.

Dissolution of joint ownership without agreement

The most challenging option is an auction for the sale of property, and this route is only possible if an agreement cannot be reached and it becomes necessary to go to court.

Dissolution of joint ownership: how does it affect the right to use and inheritance rights?

It is important to note that property ownership and the right to use are two different things. For example, in the case of a divorce, it is necessary to uphold the right to use the housing in favor of one of the parties, as established by an agreement or court decision.

How much does it cost to terminate joint ownership?

The price depends on the type of solution reached. Therefore, it's hard to imagine a calculator for terminating joint ownership or a similar tool.

What are the expenses and taxes when terminating shared ownership?

It should be noted that the tax dissolution of joint ownership is much cheaper than buying, as there is no inheritance tax to pay. This is because the amount of money received by the person leaving the community is not considered a sale price, but rather a monetary compensation for the fact of exiting the shared situation.

Termination of joint ownership: Personal Income Tax 2024

It is important to know that if you give up part of your property and receive income from it, the potential profit must be taxed as personal income tax (PIT).

Dissolution of joint ownership and profit tax

Another tax advantage of terminating joint ownership is that this operation is not subject to the communal tax or the Tax on the Increase in Value of Urban Land (IIVTNU).

Termination of joint ownership with a mortgage

Very often, especially in the case of marriage, there is a mortgage on the share of property related to housing that is in question.

What is needed to carry out the termination of shared ownership?

In general, in the case of an agreement, it is sufficient to arrange a meeting at the Notary's office and present the main documents: Identification of all parties. Valuation or cost of the property. Documentation regarding the property (contracts and any significant documents). Documentation on payment methods.