What is the extinction of the condominium

The extinction of the condominium is one of the options that arise when a couple separates and has contracted a mortgage at 50%. In a nutshell, it is about selling your part to the other. But to be able to carry it out, a series of considerations must be taken into account. Because from .com we want to make your life easier, we explain what is the extinction of the condominium .

Tax savings compared to the sale

To use the figure of the extinction of the condominium in the place of the sale of 50% supposes an important fiscal saving. The saving comes because the tax paid for a purchase-sale is 7%, while for the extinction of the condominium, only 1% plus the cost of the notary is paid. In short, there can be a saving of about 7, 000 € for a sale of about € 100, 000 (valuation of half of the mortgage) if we use this figure instead of the sale.

You do not own, but you do owe

Extinguishing the condo is simple and relatively cheap, as we have already seen. But it has its dangers. The problem is the mortgage loan; since to sign before a notary the extinction in favor of the ex-partner supposes to stop registering in the Land Registry. It has nothing to do with the bank. That is, for the entity that granted the loan, it remains a debtor even if it no longer appears in the Property Registry. The extinction of the condominium does not suppose to stop being the owner of the loan . What does it mean? That if the ex-partner stops paying the bank, they can garnish your payroll. In the best case, in which there are no payment problems, think that you may have difficulties asking for another mortgage or loan in the future.

Recommendations for the signature

Never sign a condo extinction before you have approved a new mortgage in which the owner is the person who will own 100% of the home. That is to say, first who stays the house must process a mortgage in which only he / she appears as owner (with the demands of the bank in question); On the day of the signature before a notary, the deed of condominium extinction is signed first, followed by signing a deed of mortgage loan.

Asymmetrical parts

A problem that can appear is that the mortgage is not being paid at 50%, that is, that the two members of the couple do not pay the same part of the mortgage . In these cases, it is necessary to establish a modification and each member must pay 50%. The problem comes because the Treasury can understand this transfer as a donation, a fact that would cause the payment of taxes. In these cases it would have to be justified that it would be a loan and not a donation.

Extermination of condominium

This possibility occurs when, despite the separation, there is still good relationship between the members of the couple that one of the two does not want any money. In this case, an extermination of the condominium can be reported, but really the member of the couple that "sells" their share, is giving it to the other, although, in this way, impositions by donation are avoided.

Intermediate solutions

To avoid all the inconveniences for the condominium, there are different intermediate solutions, such as cohabitation despite being divorced, so that they would continue paying the mortgage halfway until one of the two decides to rent another home or move to another place, while the other member of the couple stays in the mortgaged house, after agreeing on the distribution of the mortgage and other expenses.

• Do not accept the extinction of the condominium despite what the separation agreement says, for the bank it will be debtor while figures in the ownership of the loan.
• To resolve doubts and receive advice, visit a notary with time and in advance.