Buying a Costa del Sol holiday home jointly with friends or family can make good financial and practical sense. However, it is important to consider how changing circumstances might affect the arrangement and agree from the beginning how future decisions would be handled.
"It seems like a great idea!"
We often talk about the importance of asking questions when we first meet buyers. Before we can start finding the right property, we need to understand who's buying, why they're buying, and how they expect to use it.
One of the more challenging situations can arise when two families, friends or members of the same family decide to buy a property together. For a holiday home, sharing can make a lot of sense. The purchase price and running costs can be divided, and a home that might otherwise stand empty for much of the year can be enjoyed by more people. But there are a couple of points that need thinking through.
Find a property that works for everyone
It sounds basic, but finding the right property for one couple can involve balancing different priorities. When four or more people are involved, it inevitably becomes more complicated. One may see location as the priority, while somebody else wants more outdoor space. One family may be used to individual privacy, whereas the other tends to spend more time all together. Even deciding who has which bedroom can become an issue.
Compromises can usually be found and, in fact, finding the property that everybody likes may ultimately be the easier part. The more difficult questions concern what happens after you've bought it.
Have the "what if?" conversation
When people decide to buy together, they naturally think about their circumstances as they are today. Everyone gets on well, can afford their share and expects to continue enjoying holidays in Spain for many years, and hopefully they will. But before buying, it is important to have what I would call the what-if conversation.
What if one family's financial circumstances change? What happens following a divorce or death? What if the children grow up and lose interest in family holidays, or one family simply decides that it would rather go somewhere else? Two families in very similar circumstances today may be in quite different positions five years from now. None of this means that buying together is a bad idea. It simply means that these possibilities are better discussed before they happen.
Sometimes saying nothing is the biggest problem
It is easy to imagine a disagreement arising when one family wants to sell and the other does not. In practice, the problem can be more subtle. One family may need its money back but be reluctant to say anything because it knows how much the others enjoy the property. It continues paying its share of the expenses whilst becoming increasingly unhappy with an arrangement it once welcomed. This can put a lot more strain on a friendship or family relationship than an open conversation would have done.
Family ownership is not necessarily easier
The same considerations apply when brothers, sisters or other relatives buy together. They may get on extremely well, but their partners and children may not have the same relationship. Over time, circumstances and relationships change, and the property may eventually pass to another generation. In many ways, joint ownership can be easier when it is treated as a business arrangement. Business partners expect to discuss what happens if one of them wants to leave. With friends and family, those conversations can feel uncomfortable precisely because the relationship is personal.
Would two properties be better than one?
This is particularly worth considering when sharing ownership is not financially necessary. If two families have the budget to buy a large property together, it may be worth asking whether two neighbouring properties would work better. They could spend as much time together as they wished while each family retained control of its own home. With a new or off-plan property, there may even be an opportunity to buy adjoining homes. Subject to what is permitted, the outside areas might be arranged so that the properties work closely together while remaining legally separate.
If circumstances change, one family can sell without requiring the other to do the same. One may choose to rent its property when it is not being used, while the other may not need or want to do so. Each can make its own decisions about expenses and improvements. Proceeding in this way, they can share the lifestyle without sharing every financial decision.
Of course, this is not an option for everybody. If buying jointly is what makes owning a holiday home affordable, shared ownership may be perfectly reasonable. The important thing is agreeing from the beginning what should happen if one party's circumstances change.
Keep asking the question
It may also be helpful to agree to review the arrangement regularly. Perhaps once a year, everybody asks, "Are we still happy to continue for another year?" This gives anyone whose circumstances have changed a natural opportunity to say so, rather than having to raise the uncomfortable subject unexpectedly.
Buying jointly can work, but it does need careful thought, particularly when it is not financially necessary. Do not consider only whether the arrangement suits everybody today. Discuss what might change, agree how you would deal with it, and take appropriate legal and tax advice about how the ownership should be structured. Plan for the friendship or family relationship to last, but do not structure the property purchase so that it has to.
Over the years, we've sold many properties to families and friends buying together. After careful consideration and planning, most have proved to be a good move. We simply urge you to ask the questions and, if you need any help, call us on (0034) 952 90 52 00, WhatsApp us, or email info@michael-moon.com. We look forward to hearing from you.
