Selling the property in a divorce: what you need to know

The family home is usually the most significant asset in a divorce. It is also the most contentious. The decisions made about it during the process — often under emotional pressure — have financial consequences that last for years.

This article does not replace legal advice. But it will help you understand the options, the timelines, and the most common mistakes.

The three basic options

When a couple divorces and there is a jointly owned property, the options are:

1. Sell and divide. The cleanest approach. The property is sold, the outstanding mortgage (if any) is paid off, taxes are settled, and the proceeds are divided. This is the most advisable option when neither party wants or is able to keep the property.

2. One party buys the other out. This requires a professional valuation that both parties accept, the financial capacity for the buyer to take on the other party’s share (and the mortgage, if there is one), and agreement on the price. If no agreement is reached, the court can order the sale.

3. Retain the property in co-ownership (proindiviso). The worst option in almost every case. It generates disputes over maintenance, expense payments, and future decisions. Moreover, either party can petition the court to dissolve the co-ownership at any time.

Who decides whether to sell

It depends on the type of divorce:

• By mutual consent: both parties jointly decide what to do with the property in the regulatory agreement (convenio regulador).
• Contested: if there is no agreement, the judge can assign the right of use of the property (usually to the spouse who retains custody of minor children) and the sale is postponed until the circumstances change.

The assignment of use does not transfer ownership. The spouse who is not occupying the property remains a co-owner and remains liable for the mortgage if it is in both names.

Taxation of the sale in a divorce

The sale of the marital home in a divorce has specific tax implications:

Capital gain (ganancia patrimonial). Each spouse is taxed on half of the gain (the difference between the purchase price and the sale price). If the property was purchased before 2013, there may be abatement coefficients (coeficientes de abatimiento) that significantly reduce the tax bill.

Reinvestment exemption. If you allocate the proceeds to purchasing another primary residence within 2 years, the gain is exempt from income tax (IRPF). This applies individually — one spouse can claim it even if the other does not.

Exemption for those over 65. If either spouse is over 65 and the property is their primary residence, the capital gain is exempt.

Plusvalia municipal (local capital gains tax). This is payable in all sale cases, regardless of personal circumstances.

Common mistakes

Accepting a valuation without cross-checking. Under the pressure of the process, it is tempting to accept the first figure that comes along. But an inaccurate valuation can cost you tens of thousands of euros. Obtaining an independent professional valuation protects both parties.

Selling in a rush and underselling. The need for quick liquidity leads to accepting offers well below market value. In high-end properties in Madrid, the difference between a hasty sale and a well-managed one can be 10-15%.

Not considering an off-market sale. In a divorce, discretion is especially important. It is not always desirable for the property to appear published on portals — particularly if the spouses are well known in their professional or social circles.

Forgetting the transaction costs. Estate agency commission, plusvalia municipal, mortgage cancellation at the registry, notary fees, income tax on the capital gain — all of these costs reduce the net proceeds. Calculate them before setting expectations for the division.

When to sell

The timing of the sale depends on several factors:

• Before the ruling: if there is agreement, the property can be sold at any time. This simplifies the regulatory agreement because the asset has already been liquidated.
• During the proceedings: this is possible if both parties agree or if the judge authorises it.
• After the ruling: if the right of use has been assigned to one spouse, the sale is postponed until that assignment ceases (for example, when the children reach the age of majority).

For premium properties, our recommendation is to sell as soon as possible if there is agreement. The property market is cyclical, and a property held in co-ownership accumulates costs and depreciation risk.

The role of the real estate adviser

In a divorce-related sale, the real estate adviser does not represent one spouse — they represent the transaction. Their role is to:

• Provide an objective valuation that both parties can accept
• Manage the sale with the utmost discretion
• Screen buyers to minimise unnecessary viewings
• Coordinate with both parties’ lawyers and with the notary
• Achieve the best possible price to maximise the net amount to be divided

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Do you need to sell a property in the context of a divorce? Request a confidential valuation and we will help you manage the transaction with complete discretion.