# Shared ownership



## Causey16 (Feb 23, 2014)

Hi everyone, this is my first post on the forum. My wife and I are looking to buy a holiday home in Spain which we will use for up to 6 months each year split into 3 or more separate holidays. Most of the time will be off season. I was wondering in these times of austerity whether there is a market for us to buy a half share in a property from an existing owner who may wish to cash in some equity from their home. Also what would the legal position be regarding this type of transaction. Thanks for any info.


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## jojo (Sep 20, 2007)

I dont know about the legality or how acceptable this would be - I'm sure there are many who would be more than happy to do this. However, my first thoughts would be the pitfalls - of which they'd be so many, decoration, tastes, furnishings, damage, bills, work, wear and tear..........

See what other posters come up with


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## snikpoh (Nov 19, 2007)

jojo said:


> I dont know about the legality or how acceptable this would be - I'm sure there are many who would be more than happy to do this. However, my first thoughts would be the pitfalls - of which they'd be so many, decoration, tastes, furnishings, damage, bills, work, wear and tear..........
> 
> See what other posters come up with


The other important point is, what if one share owner wanted to sell their share? 

Would they be able to find someone else to buy their share? Would the other share owner be obliged to buy their share? 

What about when one of the share owners passed away, would the inheritor be so obliging? What if the inheritor rejected the inheritance - the Government would have a field day with that one I'm sure!


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## jojo (Sep 20, 2007)

Its an interesting concept and question tho??? 

Jo xxx


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## fergie (Oct 4, 2010)

Causey16 said:


> Hi everyone, this is my first post on the forum. My wife and I are looking to buy a holiday home in Spain which we will use for up to 6 months each year split into 3 or more separate holidays. Most of the time will be off season. I was wondering in these times of austerity whether there is a market for us to buy a half share in a property from an existing owner who may wish to cash in some equity from their home. Also what would the legal position be regarding this type of transaction. Thanks for any info.


There are so many really cheap bargains for homes at the moment, if you could afford to buy one for your own use, on a safe complex, then lock it up and go, and enjoy it yourself.
Pitfalls if you shared ownership, the other owners might not look after the place-they could be slobs!,if they may fall into debt and not be able to afford their half of the mortgage- it puts you in a difficult position.
Electric bills, water bills community charges would also cause concern, if co owners are using the property more than you are.
We had a holiday property which we had for our sole use, while we were not using it we allowed our daughter and family to stay there for a fortnight holiday, six weeks later we went to stay in our place, to find it very tidy and neat, but she had left all the air con on in a few rooms, and many lights on, we did tick her off, and she is just family.
Now we rent our holiday home out to long term tenants, they are really good caring people.


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## baldilocks (Mar 7, 2010)

fergie said:


> Now we rent our holiday home out to long term tenants, they are really good caring people.


You are aware that you now need a licence to do that and there are, now, many more controls.


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## fergie (Oct 4, 2010)

Yes we are aware, it is 'let' through a registered agent, our solicitor arranged the various papers etc.


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## xabiaxica (Jun 23, 2009)

baldilocks said:


> You are aware that you now need a licence to do that and there are, now, many more controls.


I don't think that's right 

you need an energy cert & to declare the income

but not, as far as I'm aware, a licence to rent long term


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## xabiaxica (Jun 23, 2009)

fergie said:


> Yes we are aware, it is 'let' through a registered agent, our solicitor arranged the various papers etc.


do you really need a licence to let long term?


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## Alcalaina (Aug 6, 2010)

xabiachica said:


> do you really need a licence to let long term?


Depends on the AC probably. Never heard of this in Andalucía.

As regards the OP, it might be a better option to buy a place outright and do holiday lets in high season to friends and family or via an agent.


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## fergie (Oct 4, 2010)

xabiachica said:


> do you really need a licence to let long term?


No we didn't require a license, for a long term let, (although we did ask about this when the new rules came in last year), our solicitor said only short term rentals needed the licenses, but she arranged for an energy certificate, as she had dealt with the builders and us since the house was bought off plan. Our tenants have been in the property for nearly four years, and the house is fairly new, plot bought off plan in 2004, house not ready till 2006, built to very high spec, with modern electrics, and double glazing.


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## Causey16 (Feb 23, 2014)

Thanks for the input so far, I have a friend who owns a quarter share of an apartment in Benalmadena and he has had no issues with the payment of bills etc. He assures me the legal position is exactly the same as owning the whole property as each part owner can sell at any time, in fact I was offered a quarter share but unfortunately the weeks available did not suit. The property would require to be suitable I.E. Decoration etc before I would purchase and I would need to have formed a favourable opinion of the present owners, 33 years as a cop in Glasgow gives a good sense of the character of people you meet. Thanks again.


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## snikpoh (Nov 19, 2007)

Causey16 said:


> Thanks for the input so far, I have a friend who owns a quarter share of an apartment in Benalmadena and he has had no issues with the payment of bills etc. He assures me the legal position is exactly the same as owning the whole property as each part owner can sell at any time, in fact I was offered a quarter share but unfortunately the weeks available did not suit. The property would require to be suitable I.E. Decoration etc before I would purchase and I would need to have formed a favourable opinion of the present owners, 33 years as a cop in Glasgow gives a good sense of the character of people you meet. Thanks again.


Ah, so it's a time share!

As I understand it, that's completely different. You never actually own the property, just the right to use it at predetermined times of the year (or am I mistaken?).

Still don't know what happens in respective of succession tax (IHT) etc.


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## jojo (Sep 20, 2007)

Thinking about it, I have a friend who, with a friend bought a holiday apartment. It was on a complex and was empty for much of the year, altho it was available for either of them, their families etc to go to. I think it was ok, maybe a few little "spats" about leaving it tidy, who damaged what etc..... In the end, my friend needed to leave as she was moving on, so the other partner bought her out!

Jo xxx


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## Causey16 (Feb 23, 2014)

Snikpoh, no not a timeshare it is shared or fractional ownership you jointly own the property.


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## expatgal (Mar 4, 2013)

*fractional ownership*



Causey16 said:


> Hi everyone, this is my first post on the forum. My wife and I are looking to buy a holiday home in Spain which we will use for up to 6 months each year split into 3 or more separate holidays. Most of the time will be off season. I was wondering in these times of austerity whether there is a market for us to buy a half share in a property from an existing owner who may wish to cash in some equity from their home. Also what would the legal position be regarding this type of transaction. Thanks for any info.


It's often referred to and called fractional ownership. If you decide to go this route, think of it as less a burden to you. You won't be soley responsible for maintenance. Here in the states there are many who share this under an LLC, and usually it's for a flat, house, in the EU. Many own it with more than one owner, for example, two to three month blocks. In France you may not rent it out, if you do, it changes the tax ramifications. Spain I don't know.
Also, if one decides to sell, if in the LLC all have come to an agreement, in which the LLC (owners) have first option of buying the fraction.
I think it's great. 
Of course you will need to understand the Spain (thing), for lack of a better word.
If I were to buy into such an ownership, I would want the home to be in the best of shape, furnishings, landscaping, etc. You would also need to know the background of possible owners.
Taxes and maintenance fees are paid for...into an escrow account, and if need be, one and all can and often decide which fractional owner will use it certain months..rotation.
You will need to find out about inheriatnce laws.

I hope this has been of some help to you. It's a wonderful avenue to ownership.


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## Causey16 (Feb 23, 2014)

Expatgal, I agree with everything you said and I know it is a popular concept in the USA but it doesn't seem to have taken off in Spain or other European countries. I would have thought it would be a good way out of financial difficulties for owners who instead of possibly losing their property they could retain a half share.


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## baldilocks (Mar 7, 2010)

I think it could be fraught with problems. It might work between [close] family members - e.g. siblings, but between strangers...

We have had, on the Forum, people who had gone into flat-shares and run into all sorts of problems, imagine what it would be like if you have money invested in the property and can't just walk away.?


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## expatgal (Mar 4, 2013)

I should have been more clear, my mistake.
Many in the US have purchased fractional ownersfhip shares in France and Germany, it's recently started to pick up in Italy.
Many own through an LLC registered in the US. 
You're correct, it would be a good way, however, if you're searching for possible owners this way, you need to be absolutley positive they're not in seriuos financial difficulties, as we all know...the government always gets their share, back taxes etc. they have extremely long arms.
It's important to note for posters (lurkers) this is not a time share, may seem like it, but it is not.


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