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Survey Spain SurveyorsSome owners may be unaware there is a special legal procedure that can be followed in Spain to re-arrange property holdings which saves buyers a considerable amount in taxes. On buying resale property in Spain, a buyer is normally liable for Property Transfer Tax (ITP) (which ranges between 7% to 10% depending on the region in Spain where the property is located). However, on following what is known as a “Dissolution of Joint Property Ownership” (DJPO, for short) a buyer only attracts 1.5% Stamp Duty.

Signing a deed of Dissolution of Joint Property Ownership allows joint owners to re-arrange their share on a property in a tax-efficient manner as it enables the outgoing joint owner to transfer his share to an existing co-owner legally waiving the extreme Property Transfer Tax and paying in lieu 1.5% Stamp Duty on the full property value. This results in tax savings of up to 86%!

This service is suitable:

  • In a divorce or separation.
  • Re-arranging inheritances.
  • Re-arranging property holdings between family and friends.

DJPO Requirements

  • Both buyer and vendor need to be pre-existing owners of the property i.e. a married couple who own a property in joint names. One of them wishes to terminate the situation and sell his share to his ex-partner.
  • If there is an outstanding mortgage on the property, a lender’s permission may be required to release the outgoing borrower/owner from his commitment.

Associated Taxes and Fees


  • Liable for 1.5% Stamp Duty on the full property value. Stamp Duty is paid on the full value of the property, not only on the outgoing share.
  • Lawyer’s fees.
  • Notary fees.
  • Land Registry fees.


  • Liable for capital gains tax on the outgoing share.
  • Lawyer’s fees.

If the vendor is non-resident, a 3% retention is practiced on the outgoing share. The CGT payable would amount to 19% (for EU/EEA residents).

Example: On a property worth €300,000, jointly owned by a couple, the husband would only pay 1.5% on the full property value or €4,500 in lieu of 8% Property Transfer Tax. That amounts to a tax reduction of over 80%!

This article was written by Raymundo Larraín Nesbitt of Larraín Nesbitt Abogados, Marbella.