Dividing an existing house can be an attractive option to optimize space usage and increase property value. This process, involving both technical and legal aspects, requires careful planning. There are different types of division, each subject to specific regulations. This article explains the necessary steps and considerations to effectively and legally carry out this operation.
Types of property division
The division of a property can be done in various ways, depending on the characteristics of the property and the specific needs of the owners. There are three main types of division: horizontal, vertical, and parcel segregation, each with its own particularities and legal requirements.
Horizontal division
Horizontal division refers to transforming a property, typically a multi-story building, into different independent units that can be owned by different proprietors. This modality is common in apartment buildings or condominiums. Each unit has its own entrance and services, allowing each owner to enjoy their private space without interference from others.
This type of division involves considering the creation of common areas and ensuring that all units meet minimum habitability requirements. Horizontal division is governed by the Horizontal Property Act, 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 is mainly applied to single-family homes and consists of separating a house into two or more adjoining units. This form of division can be especially useful in urban areas where land scarcity drives owners to maximize the use of their properties. Unlike horizontal division, which focuses on the use of spaces on different levels, vertical division centers on the creation of new adjacent homes.
This division often requires both structural modifications to the building and the creation of independent accesses for each new unit. It is also necessary to consider the insulation between homes to ensure the privacy and comfort of their occupants.
Parcel segregation
Parcel segregation is an alternative that allows dividing a large plot into smaller parcels where new homes can be built. This type of division is common in rural areas or expanding urbanizations. Segregation involves all legal aspects related to the modification of the original land ownership and the creation of new estates.
It is crucial that the segregation complies with local urban planning regulations, which establish criteria on the minimum size of parcels, the distance between buildings, and the necessary infrastructures. Creating a new estate can offer significant economic opportunities but also entails responsibilities in terms of regulatory and tax compliance.
Legal and regulatory aspects to consider
The division of an existing 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 fundamental to avoid future legal problems.
State legislation
The regulations governing property division in Spain are extensive and varied. It is essential to become familiar with the laws that may impact the segregation process. Among them, the following stand out:
Land law
The Land Law establishes the basic principles for land planning throughout the country. This legislation determines how land can be used and what 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 may 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 rules complement the Land Law and address specific details about land use and planning in each region. It is vital to research the local regulations that may affect property division, such as minimum required surfaces and habitability criteria that must be met.
Legality of the Horizontal Property Act (HPA)
The Horizontal Property Act regulates aspects related to buildings divided into several floors or units. For owners who wish to divide their property within a building, this law is crucial. Elements such as the right to modify the property, conditions for making 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.
Regulations of the town hall
Town halls have specific competences regarding property construction and modification. Local regulations may include requirements such as building permits, adaptations to urban planning, and aesthetic criteria that must be respected. Therefore, it is fundamental to contact the corresponding Town Hall to understand the specific regulations that affect property division.
Administrative authorization
Once the relevant regulations have been reviewed, the next essential step is to obtain the necessary administrative authorization. This process can vary depending on the type of modification and the specific requirements of each municipality.
Municipal permits
The permits required to carry out a property division usually include a building license 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 essential to submit a technical project detailing the modifications to be made.
Documentation needed for the application
To apply for administrative authorization, it is essential to prepare a series of documents. These may include:
- Technical project prepared by an architect.
- Certificate of non-debt with the homeowners’ association.
- Receipts of payments for related municipal fees.
- Documentation proving ownership of the property.
Approval from the homeowners’ association
If the property to be divided is located within a building governed by horizontal property regulations, it is essential to obtain approval from the homeowners’ association. This step is critical to ensure there are no conflicts with other owners and that the division is legally valid.
Requirements for approval
To have the division project approved, certain requirements established by the Horizontal Property Act must be met. The proposal must be compatible with the association’s bylaws and not cause harm to any neighbor. Internal regulations governing the association must be taken into account, as there may be specific restrictions on structural modifications.
Voting in the homeowners’ association
Obtaining permission requires convening a meeting of the homeowners’ association, where the division proposal must be presented. A favorable vote from at least three-fifths of the owners is necessary. At this meeting, the benefits and legality of the project should be explained to ensure everyone understands its impact.
Impact on common areas
Another important consideration during this process is the effect the division will have on the building’s common areas. Any modification involving changes to the access, use, or alteration of shared spaces must be carefully evaluated. The homeowners’ association can legitimately oppose a proposal if it believes it affects their rights or the functionality of common areas.
Procedure to divide a house into two
Dividing a property into two units is a process involving multiple administrative and technical steps. It is essential to follow a proper procedure to ensure the division complies with all current legal and urban planning regulations.
Consulting the current legislation
Before starting the property division process, it is crucial to consult the current legislation governing such operations. Applicable regulations may vary depending on the autonomous community and municipal regulations.
Review of applicable regulations
The first step is to thoroughly study urban planning regulations and the Horizontal Property Act, as well as any other relevant legislation related to property division. Understanding these requirements is essential to ensure the segregation is carried out according to stipulations, avoiding future inconveniences.
Consultation with a specialized lawyer
Hiring a lawyer specialized in real estate law is a smart decision. This professional can guide you on complying with applicable regulations and help resolve doubts related to the possible complexity of the necessary documentation.
Requesting permission from the homeowners’ association
Once legal information is gathered, the next step is to request permission from the homeowners’ association if the property is part of a building under horizontal property regulations. This authorization is crucial to proceed with the division.
Meeting call
To make this request, it is necessary to convene a meeting of the homeowners’ association. In this meeting, the division proposal will be presented, and its feasibility and implications for all community members will be discussed.
Notification to the owners
It is important to notify all owners of the intention to divide the property. This notification must be clear and detailed, informing about the proposed changes and the duration of the meeting where the decision will be made.
Preparing a technical project
The next step in the procedure is to prepare a technical project covering all necessary specifics for the new property configuration. This project will be the basis for obtaining the corresponding licenses.
Hiring an architect
For the preparation of the technical project, it is advisable to hire an architect. This professional will not only develop the necessary plans but also ensure compliance with all Building Technical Code regulations.
Minimum surface area of the new units
Each new unit must comply with the minimum surface area required by the current legislation in the locality. This aspect is crucial for the viability of the division and obtaining the corresponding permits.
Design of independent entrances
Each new property must have an independent entrance. This guarantees 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 the new tenants or owners and avoids conflicts with the community due to noise or lack of privacy.
Applying for a building permit
Once the technical project is prepared, the next step is to apply for a building permit from the corresponding town hall. This license 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 required documentation when applying for the building permit. Each town hall may have specific requirements that must be met to avoid future problems.
Application fee and associated costs
Application fees for the building permit vary depending on the locality and the estimated cost of the works. It is advisable to consider these expenses when planning the overall project budget.
Registration in the land registry
Once all permits are obtained and the division works are completed, the next goal is to register the new situation in the Land Registry. This step is vital to ensure the legality of the new units.
Obtaining the certificate of habitability
Before registration, it is necessary to obtain the certificate of habitability, which certifies that the new units meet all habitability conditions established by law. This document will be necessary for any subsequent procedure.
Public deed before a notary
With the certificate of habitability in hand, the next step is to formalize the situation with a public deed before a notary. This step is essential to formalize the segregation and ensure it is recorded in the notarial registry.
Registration in the land registry
Finally, the new division must be registered in the Land Registry. This ensures legal protection of the new units and their official recognition as independent properties.
Regularization of the cadastral situation
Despite having followed all previous steps, it may sometimes be necessary to regularize the cadastral situation. This process is fundamental to ensure that the recorded data is accurate and up-to-date.
Cadastral verification
It is important to carry out a verification in the Land Registry to ensure that the division is correctly reflected in the records. This step may involve several procedures and formalities, which must be approached with patience.
Situations of ‘non-conforming use’
In some cases, part of the construction may be considered as “non-conforming use”. This occurs when current urban planning regulations are not met. In such situations, there may be limitations for regularisation and division, so it is always advisable to have appropriate legal advice to address these challenges.
Tax considerations
The division of a property involves a series of tax obligations that need to 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.
Documented Legal Acts Tax (IAJD)
The Documented Legal Acts Tax is one of the most relevant taxes to be faced when carrying out a property division. This tax applies to the division deed and can vary in amount depending on the autonomous community where the property is located.
Tax calculation
The IAJD is calculated based on the value declared in the public deed of division. Generally, this percentage can range between 1% and 1.5% of the property value, although each community has its own regulations. To obtain an exact figure, it is advisable to consult a tax advisor who can guide you through the process of evaluating the tax to be paid.
Variations by autonomous community
Each autonomous community in Spain has the power to set different tax rates for the IAJD, which can result in significant variations in the cost of the operation. For example, some communities may offer reductions or exemptions in certain cases, such as for first-time home buyers, which can help adjust the total expenditure. Checking the specific regulations of each region is crucial to minimise associated costs.
Personal Income Tax (IRPF)
The IRPF is another important aspect to consider, especially if the new units are rented or sold. The income generated from these activities is subject to taxation, which can have significant economic implications for the owners.
Declaration of rental income
If the new properties are to be rented out, it is essential to include the income obtained in the IRPF declaration. This income will be considered as real estate capital income and must be declared as such. In addition, certain expenses, such as those related to the maintenance and improvement of the property, can be deducted, which may reduce the taxable base.
Implications of selling units
If the new properties are to be sold, it should also be borne in mind that the profits obtained will be subject to IRPF. In this case, the capital gain is calculated as the difference between the sale price and the purchase price, taking into account the expenses associated with the purchase and sale. Therefore, keeping an accurate record of all this data is essential to correctly complete the declaration.
Other expenses
In addition to the taxes mentioned, there are other expenses to be considered in the process of dividing a property. These expenses can add up to a significant part of the total cost of the operation.
Municipal fees
Municipal fees can vary depending on the corresponding town council and usually include fees for the processing of permits and other related services. It is advisable to find out about these local fees before starting the process, as they can directly affect the budget available for the division of the property.
Professional fees (architects, lawyers)
The fees of professionals involved in the process, such as architects and lawyers, should be considered in the total expenses. Architects are necessary for the technical design of the division project, while lawyers are responsible for the proper drafting of documentation and compliance with legal requirements. Both can significantly impact the total cost of the project, so it is advisable to request several estimates and study the available options.
Notary fees
Finally, notary fees are also an important part of the process. This expense refers to the fee paid to the notary for the notarisation of the public deed of division and may vary depending on the value of the property and the notary’s fees. As with other expenses, keeping track of these fees and obtaining several estimates can help manage the overall project budget effectively.
Advantages and disadvantages of dividing a house
Dividing a house can offer multiple benefits, but it also entails certain drawbacks that must be carefully considered. Below are the advantages and disadvantages of this practice.
Advantages
The decision to divide a property should not be taken lightly, as it can greatly influence finances and space usage. Below are some of the main advantages of dividing a house.
Higher income
One of the most common reasons for opting for a house division is the potential increase in income. This is mainly due to the following considerations:
- Renting several units can generate significantly higher cash flow than renting a single property.
- The sale of the new properties is usually more lucrative, as they can be adapted to a broader market.
- In high-demand areas, having multiple units can result in faster property appreciation.
Flexibility of use
Dividing a house allows for greater flexibility in its use. This translates into:
- The possibility of allocating part of the house for rental purposes while inhabiting another part. This can be especially useful for families seeking additional income.
- The creation of independent spaces that can be used as offices, studios, or even housing for family members, thus providing multi-generational solutions.
- Adapting the new units to different needs, such as accessible units for the elderly or disabled.
Increase in wealth
Dividing a house can result in a significant increase in the owner’s wealth. This is due to:
- The increase in market value associated with smaller properties, which are in high demand in urban and suburban contexts.
- The possibility of diversifying assets, as having several units can reduce financial risk by providing multiple sources of investment.
- The creation of a real estate portfolio that can provide long-term financial security.
Disadvantages
Despite the multiple advantages, it is also crucial to consider the disadvantages that the division of a property may entail. The implications can vary, but below are some of the most relevant ones.
Additional costs
Dividing a house involves a series of expenses that can quickly add up. This includes:
- Architects and lawyers fees, which are necessary for the preparation of technical projects and the processing of permits.
- Costs associated with obtaining municipal licences and permits, which can be significant depending on the locality.
- Notary fees and other taxes, such as the Documented Legal Acts Tax (IAJD), which directly impact the initial investment required for the division.
Administrative complexity
The division of a house is not only a physical process but also an administrative one that can be complicated. This may involve:
- Bureaucracy related to obtaining the required permits, which can be tedious and sometimes frustrating.
- The need to comply with multiple urban and safety regulations, which can significantly prolong the process.
- The risk of objections or forced adaptations, which may arise depending on local regulations and the community of owners.
Potential conflicts with the community of owners
In the case of properties under horizontal property regimes, the division can generate tensions with other owners. In this context, the following may arise:
- Controversies related to the use of common areas if the division affects these areas or their maintenance.
- Resistance from some members of the community who are not in favour of the division, which can lead to complicated votes and prolonged debates.
- A climate of distrust that affects relations between neighbours, especially if the division is perceived as a change in the dynamics of the building.
Professional advice is essential when dividing a property. Having experts in different areas ensures the correct execution of the project and helps prevent legal or technical problems that may arise during the process.
Professional advice
Architect, La Quinta Fachada
Project roles
The architect plays a fundamental role in the planning and execution of the property division project. La Quinta Fachada offers crucial experience to ensure that the new design complies with current regulations and is suitably adapted to the needs of future inhabitants. The architect’s roles include:
- Preparing a technical project that includes all necessary characteristics for the division.
- Ensuring that the new units meet the minimum surface area required by legislation.
- Designing the layout of spaces, optimizing the functionality and comfort of each dwelling.
- Supervising compliance with thermal and acoustic insulation standards, ensuring a habitable and private environment.
Design advice
The architect also integrates their creative and technical vision to provide innovative design solutions. Some advice they may offer includes:
- Integrating sustainable materials to reduce the environmental impact of the work.
- Maximizing natural light entry, creating more pleasant spaces that require less artificial lighting.
- Considering the possibility of an adaptable design that allows for future modifications or reconfigurations in the use of spaces.
Lawyer
Legal documentation
The intervention of a lawyer specialized in real estate law is essential to manage the legal aspect of the division process. This professional is responsible for:
- Reviewing the applicable regulations to the property and ensuring that all procedures are followed in accordance with the law.
- Advising on the rights and obligations of the owners concerning the community of neighbors.
- Drafting and preparing all necessary documentation, including drafts and permit applications to be submitted to the competent authorities.
Drafting the public deed
A critical aspect of the lawyer’s work is the drafting of the public deed that formalizes the division of the property. This deed must reflect the new state of the property and ensure that legal requirements are met. The aspects to consider include:
- Detailing the specific characteristics of the new units, including their surface area and number of rooms.
- Including clauses that protect the owners’ rights in case of future problems related to the shared property.
- Managing the registration of the new division in the Property Registry, ensuring that all changes are officially recognized.
Real estate agent
Advice on selling
The role of the real estate agent is equally relevant, especially if planning to sell the new units. Their role includes:
- Conducting a thorough analysis of the local real estate market to establish fair and competitive selling prices.
- Promoting the new properties through effective marketing strategies, utilizing digital platforms and traditional advertising.
- Negotiating with potential buyers, acting on behalf of the owners to maximize the sale value.
Local market information
The in-depth knowledge that the real estate agent has about the area where the property is located is an invaluable resource. This professional can provide key information about:
- Market trends, which can influence the selling time and marketing strategy.
- Data on demand in the neighborhood, crucial for adjusting the sales approach to the buyers’ needs.
- Aspects related to the community and neighbors that can impact the buying decision, such as available services, accessibility, and neighborhood quality.