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Four Ways to Resolve Co-ownership and Their Associated Costs

宮崎ひなた相続相談室

2026年7月18日 11:47

“Equal 50/50 splits” can become a burden later on

There is a way of dividing assets that people often choose during inheritance.

“Let’s split the ownership of both the land and the building equally, 50/50.”

At first glance, this seems like a fair and amicable solution. However, as mentioned in previous columns, co-ownership carries structural problems such as “it cannot be moved without everyone’s consent” and “the number of co-owners continues to increase as inheritance cycles repeat”.

What makes it even more troublesome is that when inheritance and transfers (sales or gifts) are mixed into co-ownership, the judgment of rights and tax matters becomes complex all at once. If some shares are acquired through inheritance and others through purchase, the acquisition dates and acquisition costs will differ for each share, making even the tax calculations at the time of sale difficult.

In this article, we will organize four ways to resolve real estate that has already become co-owned, along with their associated costs.

There are exceptions — A case where the “30 million yen deduction x 2” worked for a married couple

First, for the sake of fairness, I should mention that there are rare cases where co-ownership works to your advantage.

In one case, a married couple owned a luxury condominium in the city center as a 50/50 co-ownership. When they sold it, both the husband and wife were able to apply the 30 million yen special deduction for residential property. In other words, a total deduction of 60 million yen. For city-center properties with large capital gains, this difference is significant.

However, this is strictly a special success story. It only works if the couple both live there, meet the requirements, and have large capital gains; it does not eliminate the general risks of co-ownership (stagnation in decision-making, dispersion of shares due to inheritance).

The principle remains the same: avoid co-ownership as much as possible, and while you are alive, use a will to design a plan for “single-person succession.” If it is already co-owned, consider resolving it as soon as possible.

Now, let’s look at the methods for resolution.

Method 1: Buying and selling shares (buying out from co-owners)

A method where one co-owner buys out the shares of the other co-owners to become the sole owner.

Item Details Suitable cases When one party wants to continue using the property Main costs Purchase price, registration and license tax (2% of the fixed asset tax assessment value), real estate acquisition tax, stamp duty on the contract Tax matters Possibility of capital gains tax on the seller (the 30 million yen deduction may be applicable)

The key is to conduct the sale at a fair market price. If you sell at a price significantly lower than the market value, the difference may be considered a gift and could be subject to gift tax.

Method 2: Gifting shares

A method where one co-owner gives their share to another co-owner for free.

Item Details Suitable cases When you want to settle things between relatives without exchanging money Main costs Gift tax (based on the assessed value of the share), registration and license tax (2%), real estate acquisition tax Cautionary points Gift tax rates are high, and it can be a heavy burden depending on the assessed value of the share

There are also ways to transfer shares systematically by combining the 1.1 million yen annual basic deduction or the inheritance tax settlement system. However, proceeding without a tax burden simulation is dangerous.

Method 3: Sell the entire shared property and divide the proceeds (Liquidation)

This is a method where all co-owners sell the entire property and divide the proceeds according to their respective ownership shares.

Item Details Suitable Case When no one plans to use the property Main Costs Brokerage fees (3% of sale price + 60,000 yen + consumption tax), capital gains tax, surveying and demolition costs (if necessary) Advantages Since it is converted to cash, it can be divided fairly down to the last yen

This is the cleanest exit from a co-ownership issue. However, the hurdle of co-ownership—that the consent of all co-owners is required for a sale—stands in the way here as well. If even one person objects, this method cannot be used.

Method 4: Subdivide the land (Partition in kind)

This is a method of physically dividing a single plot of land according to ownership shares and making each part sole property.

Item Details Suitable Case Land with sufficient size and shape Main Costs Costs for surveying and subdivision registration (several hundred thousand yen or more, including boundary determination), registration license tax Points to Note The value of the land may decrease depending on how it is divided. It is difficult if a building is already standing on it

With subdivision, the value after division changes significantly depending on road access conditions and the shape of the land. Since it is possible that "half the area does not equal half the value," a professional real estate perspective is essential.

Comparison of the four methods

Method Cost Burden Consent of All Suitable Situation 1. Sale of share Medium (price + taxes) OK between parties One party wants to continue using it 2. Gift of share High (depends on gift tax) OK between parties Free settlement between relatives 3. Sale of whole Medium (fees + transfer tax) Required No one uses it 4. Subdivision Medium (surveying/registration) Required Large land

If discussions between co-owners cannot be settled, there is a final resort of filing a request for partition of shared property with the court, but this is time-consuming, costly, and often damages relationships. It is more realistic to reach a settlement through one of methods 1 to 4 through discussion before it reaches that point.

The best countermeasure is "not to create co-ownership"

We have looked at the resolution methods so far, but as you may have noticed, every method involves costs, effort, and negotiation. It takes many times more energy to resolve it than it did to create it.

That is why the best countermeasure is to "not create co-ownership in the first place."

In inheritance division, do not fall for the temptation of "splitting it equally in half," but adjust it with sole ownership + compensation money, etc.
During your lifetime, clearly state in your will "who will take over as sole owner."
If it is already co-owned, start working on a resolution now while there are few co-owners and the relationship is good.

Resolving co-ownership is an area that requires knowledge of both tax (transfer/gift) and real estate (valuation/subdivision/sale). Let's organize together which method should be used to resolve your family's co-ownership, including cost estimates.

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