Dividing an already built house can be an attractive option to optimise space usage and increase the property’s value. This process, which involves both technical and legal aspects, requires careful planning. There are different types of division, along with regulations that must be adhered to. This article outlines the necessary steps and considerations to carry out this operation effectively and legally. Types of Property Division The division of a property can be undertaken in several ways, depending on the characteristics of the building and the specific needs of the owners. There are three main types of division: horizontal, vertical, and plot segregation, each with its own particularities and legal requirements. Horizontal Division Horizontal division refers to the transformation of a property, usually a multi-storey building, into separate independent units that can be owned by different individuals. This method is common in apartment buildings or condominiums. Each unit has its own entrance and services, allowing owners to enjoy their private space without interference from others. This type of division involves creating common areas and ensuring that all units meet minimum habitability requirements. Horizontal division is governed by the Law on Horizontal Property, which establishes rules on the use and management of common areas, as well as the rights and duties of the owners. Vertical Division Vertical division mainly applies to single-family homes and involves splitting a house into two or more adjoining units. This type of division can be especially useful in urban areas where limited land availability encourages owners to maximise the use of their properties. Unlike horizontal division, which focuses on utilising space on different levels, vertical division creates new contiguous dwellings. Often, this division requires structural modifications to the building and the creation of independent accesses for each new unit. Proper insulation between the units must also be considered to ensure privacy and comfort for the occupants. Plot Segregation Plot segregation is an alternative that allows a large plot of land to be divided into smaller plots where new homes can be built. This type of division is common in rural areas or expanding urbanisations. Segregation involves all legal aspects related to changing the ownership of the original plot and creating new properties. It is crucial that segregation complies with local urban planning regulations, which establish criteria for the minimum size of plots, distances between buildings, and necessary infrastructure. Creating a new property can offer significant economic opportunities but also comes with responsibilities regarding regulatory and tax compliance. Legal and Regulatory Aspects to Consider The division of an already built house is regulated by a series of laws and regulations that must be followed to ensure the process is carried out legally and appropriately. These aspects are essential to avoid legal issues in the future. State Legislation The regulations governing the division of properties in Spain are extensive and varied. It is essential to familiarise yourself with the laws that may impact the segregation process of a property. Among the most relevant are:

• Land Law The Land Law establishes the basic principles for land use planning across the country. This legislation determines how land can be used and the requirements buildings must meet, including aspects related to property division. Owners must ensure that any proposed division complies with the guidelines of this law, which can vary depending on the autonomous community.
• Urban Planning Regulations of the Autonomous Community Each autonomous community in Spain has its own urban planning regulations. These complement the Land Law and address specific details about land use and planning in each region. It is crucial to research local regulations that may influence the division of the property, such as minimum required surface areas and habitability criteria that must be met.
• Legality of the Horizontal Property Law (HPL) The Horizontal Property Law regulates aspects related to buildings divided into multiple floors or units. For owners who wish to divide their property within a building, this law is critical. Elements such as the right to modify the property, conditions for structural changes, and restrictions on the use of common areas must be considered. Any significant change requires consensus among the owners, which can complicate the division process.
• Municipal Regulations Local councils have specific competencies regarding the construction and modification of properties. Local regulations may include requirements such as building permits, adaptations to urban plans, and aesthetic criteria that must be respected. Therefore, it is essential to consult the relevant council to understand the specific regulations affecting property division.

Administrative Authorisation Once the relevant regulations have been reviewed, the next essential step is to obtain the necessary administrative authorisation. This process can vary depending on the type of modification and the specific requirements of each municipality.

• Municipal Permits Permits required for property division typically include a building licence and registration of the new property. These permits ensure that the division is carried out in accordance with current regulations and that the new unit meets habitability standards. It is crucial to present a technical project detailing the intended modifications.
• Documentation Required for Application To apply for administrative authorisation, a series of documents must be prepared. These may include:
  • Technical project prepared by an architect.
  • Certificate of no debt with the homeowners' association.
  • Proof of payment of municipal fees related to the process.
  • Documentation accrediting ownership of the property.

Proper submission of these documents is essential to avoid delays in obtaining the necessary permits.

• Permission from the Homeowners’ Association If the property to be divided is located within a building under a horizontal property regime, it is essential to obtain approval from the homeowners’ association. This step is crucial to ensure no conflicts with other owners and that the division is legally valid.
• Requirements for Approval For the division project to be approved, certain requirements established by the Horizontal Property Law must be met. The proposal must be compatible with the association’s statutes and not cause harm to any neighbour. Internal regulations governing the association should also be considered, as they may include specific restrictions on structural modifications.
• Voting in the Homeowners’ Association Obtaining permission requires calling a meeting of the homeowners’ association, where the division proposal must be presented. A favourable vote from at least three-fifths of the owners is necessary. During this meeting, the benefits and legality of the project should be explained to ensure that everyone understands its impact.

Procedure for Dividing a House into Two Units Dividing a property into two units involves multiple administrative and technical steps. It is essential to follow an appropriate procedure to ensure that the division complies with all current legal and urban planning regulations. Consult the Current Legislation Before starting the process of dividing a property, it is crucial to consult the current legislation governing such operations. The applicable regulations may vary depending on the autonomous community and municipal regulations.

• Review of Applicable Regulations The first step is to study urban planning regulations and the Horizontal Property Law, as well as any other relevant legislation concerning property division. Understanding these requirements is essential to ensure that segregation is carried out as stipulated, avoiding future inconveniences.
• Consultation with a Specialised Lawyer Seeking advice from a lawyer specialising in property law is a smart decision. This professional can guide compliance with applicable regulations and help resolve questions related to the often-complex documentation required.

Request Permission from the Homeowners’ Association Once the legal information has been gathered, the next step is to request permission from the homeowners’ association, if the property is part of a building under a horizontal property regime. This authorisation is crucial to proceed with the division.

• Call a Meeting To make this request, a meeting of the homeowners’ association must be called. During this meeting, the division proposal will be presented, and its viability and implications for all association members will be discussed.
• Notification to Owners It is important to notify all owners about the intention to divide the property. This notification must be clear and detailed, informing them about the proposed changes and the duration of the meeting where the decision will be made.

Develop a Technical Project The next step in the procedure involves developing a technical project that includes all necessary specifications for the new property configuration. This project will serve as the basis for obtaining the corresponding licences.

• Hiring an Architect To develop the technical project, it is advisable to hire an architect. This professional will not only create the required plans but also ensure compliance with all regulations in the Building Code.
• Minimum Surface Area for New Units Each new unit must meet the minimum surface area required by local legislation. This aspect is crucial for the viability of the division and obtaining the necessary permits.
• Design of Independent Entrances Each new dwelling must have an independent entrance. This ensures the autonomy of the units and is a key requirement for them to be legally considered separate properties.
• Thermal and Acoustic Insulation Another important aspect of the technical project is designing an adequate thermal and acoustic insulation system. This ensures the comfort of new tenants or owners and avoids conflicts with the community over noise or lack of privacy.

Apply for a Building Licence Once the technical project has been developed, the next step is to apply for a building licence from the relevant local council. This licence is required to carry out any structural modifications to the property.

• Submission of the Technical Project It is essential to submit the project along with the documentation required to apply for the building licence. Each council may have specific requirements that must be met to avoid future problems.
• Application Fees and Associated Costs Application fees for the building licence vary depending on the locality and the estimated cost of the works. It is advisable to consider these expenses when planning the project’s total budget.

Registering the Property at the Land Registry After obtaining all licences and completing the division works, the next objective is to register the new situation at the Land Registry. This step is vital to ensure the legality of the new units.

• Obtaining the Certificate of Occupancy Before registration, it is necessary to obtain the certificate of occupancy, which certifies that the new units meet all habitability conditions established by law. This document will be required for any subsequent procedures.
• Public Deed Before a Notary With the certificate of occupancy in hand, the situation is formalised through a public deed before a notary. This step is essential to legalise the segregation and record it in the notarial register.
• Registration at the Land Registry Finally, the new division must be registered at the Land Registry. This ensures the legal protection of the new units and their official recognition as independent properties.

Updating the Land Register Although all previous steps may have been followed, it may sometimes be necessary to update the land register in the Cadastre. This process is fundamental to ensure that the recorded data is accurate and up-to-date.

• Cadastre Verification It is important to carry out verification at the Cadastre to ensure that the division is correctly reflected in the records. This step may involve various administrative procedures, which require patience.
• ‘Out of Planning’ Situations In some cases, part of the construction may be considered “out of planning”. This occurs when urban planning regulations are not met. In such situations, there may be limitations for regularisation and division, so it is always advisable to seek appropriate legal advice to address these challenges.

Fiscal Considerations The division of a property involves several tax obligations that must be taken into account. These aspects can significantly influence the profitability of the process and the long-term management of the new units. Below are the main taxes and expenses to consider during this process.

• Stamp Duty (IAJD) Stamp Duty is one of the most relevant taxes to be faced when dividing a property. This tax applies to the division deed and may vary in amount depending on the autonomous community where the property is located.
• Income Tax (IRPF) Income Tax is another important aspect, especially if the new units are rented out or sold. The income generated from these activities is subject to taxation, which can have significant economic implications for the owners.
• Other Expenses In addition to the taxes mentioned, there are other expenses to consider during the property division process. These include municipal fees, professional fees for architects and lawyers, and notarial fees. Proper budget planning is essential to manage these costs effectively.

Advantages and Disadvantages of Dividing a Property Dividing a property can offer numerous benefits but also comes with certain drawbacks that should be carefully considered. Below are the advantages and disadvantages of this practice. Advantages

• Increased Income: Renting or selling multiple units can generate higher cash flow.
• Flexibility of Use: The ability to use part of the house for rental purposes while occupying another.
• Increased Asset Value: Dividing a property can result in a notable increase in its market value.

Disadvantages

• Additional Costs: Includes fees for architects, lawyers, and necessary licences.
• Administrative Complexity: The division process can be lengthy and involve extensive bureaucratic procedures.
• Potential Conflicts with the Homeowners’ Association: Divisions can create tensions with other owners.

In conclusion, professional advice is essential when dividing a property. Having experts in different fields ensures the project is executed correctly and helps prevent legal or technical issues that may arise during the process.