How does a housing cooperative work?

Cooperativa de Viviendas: ¿Cómo funciona y Qué Beneficios tiene?

The cooperative regime is carving out a niche in the Spanish real estate market, offering a way to purchase property at a price lower than the market average. This model allows participants to save up to 20%, in addition to tax benefits. According to the LACOOOP platform, it’s the young people up to 35 years old who show the most interest in this alternative over traditional methods. Currently, the Confederation of Housing Cooperatives of Spain (CONCOVI) brings together 2,700 housing cooperatives across Spain.

In this article, we’ll explain what a housing cooperative is, its main advantages, and the steps you need to take to create one.

What is a housing cooperative?

A housing cooperative is a non-profit organization formed by people joining together with the common purpose of building or acquiring quality homes at affordable prices. In this model, the members act as developers, eliminating the real estate developer figure and reducing costs associated with acquiring a home. Each member is a co-owner and has a voice and vote in decision-making, ensuring democratic and transparent management. Profits are reinvested in the community and in improving living conditions.

Often, cooperatives rely on specialized managers who provide advice and management services throughout the process, ensuring efficiency and achieving the cooperative’s goals. This form of housing access promotes solidarity, quality of life, and affordability, offering a valuable option for those seeking a community and economically accessible alternative to the conventional real estate market.

How does a housing cooperative work?

Housing cooperatives operate thanks to a well-defined organizational structure. At the heart of this structure, we find key social bodies such as the General Assembly of partners and the Governing Council, which play fundamental roles in decision-making. Let’s delve into how they function and why they are so important.

General Assembly

This is where the magic happens. The General Assembly is like a big family meeting, where all the partners gather to chat, debate, and make decisions on the most important issues of the cooperative. Each person has a voice and a vote, ensuring that everyone has the opportunity to participate and express their opinion. Decisions are made by a majority, although there are special cases that require a broader consensus.

There are three types of assemblies:

  • Ordinary: This is the mandatory annual meeting, where the accounts of the year are reviewed and other agenda items are discussed.
  • Extraordinary: These are special meetings that can be called at any time to discuss urgent or important matters.
  • Universal: In this case, all partners come together spontaneously, without the need for a prior call.

Governing Council

This is the team that takes the reins on a day-to-day basis. Composed of at least three members (though there can be more), including key roles such as President, Vice-President, Secretary, and Treasurer, all democratically elected at the General Assembly. The president plays a special role, as, in addition to being a member of the team, they legally represent the cooperative and have the final say in case of a tie in the Council’s decisions.

Cooperative Managers

Managers are like the guardian angels of cooperatives. Although they do not make decisions themselves, they are there to advise, guide, and ensure that everything runs smoothly. Their presence is essential both in the Governing Council meetings and in the General Assemblies, providing support and expertise every step of the way.

Transparency and Accountability

Everything decided and discussed in the assemblies and the Governing Council is recorded in minutes, like a kind of diary that helps keep everything clear and transparent. Additionally, Council members are expected to always act with the common good in mind, being responsible to the partners and third parties for any damage they may cause due to negligence or bad faith.

In summary, understanding how housing cooperatives work is like learning to waltz; it seems complicated at first, but once you understand the basic steps, everything flows harmoniously. The social bodies set the pace, ensuring that the will of the partners is respected and that the cooperative moves in the right direction. And in this dance, cooperative managers are the perfect dance partners, guiding and advising so that every step is the right one.

Key features of a housing cooperative

Next, we explore the fundamental characteristics of housing cooperatives, an economic and participatory option for acquiring a home. These non-profit entities allow partners to be directly involved in the construction process and decision-making, ensuring transparency and control over the investment. We address points such as democratic structure, legal regulation, and financial peculiarities that define these cooperatives, giving you a clear and complete view of their operation. Here are some of their features:

It’s a Non-Profit Entity

  • It’s a non-profit society that builds homes at cost price. Without the figure of a developer, the cost price is cheaper.
  • Partners are both developers and buyers of the home. The cooperative as a society has its own legal personality distinct from that of the partners. The owner/developer is a very active part of the promotion. They will participate in its development, make decisions with the rest of the partners, choose the construction company that will execute the work, and sometimes opt for changes in qualities.

In a housing cooperative, the partners rule

  • In housing cooperatives, the partners themselves direct the society through collegiate bodies such as the general assembly and the governing council, being the only ones who make decisions. The general assembly is the highest instance of deliberation, where each partner has a voice and a vote to debate and agree on issues related to the cooperative. On the other hand, the governing council is responsible for the management and representation of the cooperative and is composed of members elected by the partners, with a minimum of three and a maximum of fifteen members. The president of the governing council also acts as the legal representative of the cooperative.

Cooperatives operate democratically

  • Decisions are made by a majority in the General Assembly. All partners attend. It is normal that not everyone agrees on some housing decisions. Therefore, the law provides a procedure to challenge agreements.

Housing cooperatives are highly regulated legally

  • The regional cooperative laws prevail over the state law and have been updated to protect the partner and their investment, facilitating housing promotions. Although they are demanding and can cause inconveniences, they seek to protect the partners.

In housing cooperatives, there is no fixed price

  • The costs of a cooperative are closed at the end when the homes are delivered to the partners. And once the expenses of the promotion have been covered. It is common for the contributions of the partners not to match exactly with the costs, resulting in a refund or additional minimal contribution.

In cooperatives, the partner must be well informed

  • Members of a housing cooperative must be constantly informed about the progress and any updates related to their future homes, as decision-making depends on this information. In addition, they have the right to vote and be voted to be part of the governing bodies of the cooperative.

Housing cooperatives must have a professional manager

  • Real estate development involves various complexities and the intervention of multiple professionals, and the partners of a cooperative generally do not have the capacity to manage it completely. Therefore, they often hire a manager to receive advice and manage all aspects of the process, from monitoring works to processing licenses and delivering homes. It is crucial that the cooperative researches the solvency, experience, and reputation of the manager before hiring them, and ensures that everything is clearly established in a contract. In addition, the relationship between the manager and the cooperative must be transparent, and the manager must always act in accordance with the instructions of the cooperative and cannot handle its economic funds.

Advantages and benefits of living in a housing cooperative

Choosing to be part of a housing cooperative can result in a smart and strategic path for those exploring the real estate market, especially if it’s their first foray into it. This approach offers many advantages and benefits, ranging from economic and fiscal aspects to the possibility of active participation in important decisions. We explain it to you in detail:

Economic Benefits

  • Cooperatives offer an opportunity to save between 20% and 30% on the cost of acquiring a property compared to traditional market prices. This is because they are built at cost, meaning partners only pay for the actual construction expenses, eliminating any profit margin that would normally be paid to intermediaries or developers. In addition, partners have the freedom to customize their homes, selecting the materials and finishes of their preference, and can also participate in decision-making regarding common areas.

Tax Benefits

For the Cooperative

  • Cooperatives enjoy a set of tax advantages, such as exemption from paying the Tax on Documented Legal Acts (AJD) and VAT on the purchase of land. They also benefit from a 95% reduction in the Economic Activities Tax (IAE) and are subject to a reduced tax rate of 20% in Corporate Tax.

For the Partners

  • Contributions made by partners to the cooperative are fully deductible on their tax return, providing a considerable tax benefit.

Participation and customization

  • Being a partner of a cooperative means having an active role in crucial decisions, which includes the ability to customize your own space and decide on common areas. This advantage ensures that your home perfectly fits your personal needs and tastes, avoiding extra expenses in future renovations.

Security and peace of mind

  • Investing in a housing cooperative is a safe alternative. These entities are under the protection of the law, and your contributions are safeguarded in special accounts, backed from the moment the building license is granted. In addition, there is the option to take out a surety insurance to further protect your investments.

Flexible payment and encouragement of savings

  • The possibility of splitting the initial payment into monthly installments facilitates financial planning, offering greater flexibility and promoting the habit of saving.

Strategic Investment

For those interested in acquiring properties for rental purposes, cooperatives present an extremely attractive option. This approach, known as Buy to Rent, requires an initial investment of only 20% of the total property value, allowing the mortgage to be covered with rental income and, consequently, increasing your assets with a relatively low investment.

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Rights of cooperative members

As an integral part of a housing cooperative, each member enjoys several rights, as established in articles 23 of Law 4/1999 and 16 of Law 27/1999.

  1. Active participation: You have the right to be an active member, attending and voting in general assemblies, and even standing for election to the governing bodies, such as the management board.
  2. Access to information: It is your right to be well informed about the crucial aspects of the cooperative. This includes receiving the statutes, having access to important documents, requesting details about the functioning of the cooperative, and proposing topics for discussion in the assemblies.
  3. Voluntary withdrawal: You can choose to withdraw from the cooperative. This act can be classified as justified or not, depending on the circumstances.
  4. Financial update and settlement: You have the right to the update and, where appropriate, the settlement of your contributions to the social capital, as well as the payments made to finance the housing. Additionally, you might receive interest on these amounts. The timeframes for these transactions vary: 18 months for voluntary withdrawals, 3 years for unjustified withdrawals, and 5 years in case of expulsion, with the necessary deductions applied.
  5. Benefits from sale or rent: If the cooperative generates income from the sale or rent of commercial premises included in the promotion, you have the right to receive a proportional share of these profits, which are often used to reduce the cost of housing. This is known as “cooperative return”.

Who can be a member of a housing cooperative

Different types of people and groups can participate in a housing cooperative society. Let’s see:

  • Individuals like you: If you need a place to live or a workspace, you can join. This also applies to the people you live with.
  • Government entities and non-profit organizations can join housing cooperative societies to provide homes or workspaces for the people they assist, thereby facilitating access to housing and employment options to improve their well-being and stability.
  • Anyone in general: If the cooperative is responsible for building and caring for homes and workplaces, everyone is welcome!

To join, you must apply in writing, and a group of people in the cooperative will decide if you can join. They will tell you within three months, and if they don’t respond in that time, it’s as if they said yes! Your request is considered approved. But if they say no, don’t worry, you can ask them to review it again.

How to create a housing cooperative

Creating a housing cooperative is a legal and administrative process that requires following several crucial steps. This ensures its proper establishment and legal operation. Here’s all the information you need to know.

  1. Application for non-coincident name certificate Starting this project involves first applying for a Non-Coincident Name Certificate from the Cooperative Registry. Depending on the geographical scope of your activity, you should address the Central Cooperative Registry (if your activity extends to more than one Autonomous Community) or the corresponding Regional Registry. This certificate confirms that your cooperative’s name is unique, avoiding coincidences with other already registered entities.
  2. Formation of the constituent assembly The next step brings all the founding members together in the Constituent Assembly. This meeting serves to make key decisions, determine the economic contribution of each member, define the Statutes, establish the objectives and mission of the entity, and finally, elect the executive officers.
  3. Public elevation of agreements and constitution deed Subsequently, the agreements made in the Assembly must be made public. This process includes formalizing the cooperative’s constitution deed before a notary. It is important to note that this step must be completed within a maximum of two months from the Constituent Assembly.
  4. Opening of the bank account and Initial social capital With the Statutes and the notarial deed in your possession, the next step is to open a bank account in the name of the cooperative. Then, you must deposit the minimum amount required for the social capital, as stipulated in the Statutes.
  5. Application for fiscal identification code (CIF) Once the bank account is open, the next step is to apply for the CIF or Fiscal Identification Code for your cooperative. This procedure can be managed directly at the notary’s office or by the cooperative itself at the State Tax Administration Agency (AEAT). Additionally, it is necessary to register the cooperative in the Economic Activities Tax and the Corporate Tax. You should also make sure to open the accounting books required by law.
  6. Settlement of taxes and property transfers Next, you must settle the corresponding taxes, including the Tax on Legal Documented Acts. This step must be completed within a maximum of one month from the date the deed was granted.
  7. Registration in the cooperative registry Finally, you must register your cooperative’s constitution deed in the Cooperative Societies Registry. This can be at the National or Regional level, depending on how your cooperative’s activity is geographically distributed. Until the society is duly registered, you must add the term “in constitution” to the social denomination.

What do I need to do to join a housing cooperative?

Before investing in a housing cooperative, it is crucial to carry out thorough research. Here we provide you with a complete guide to help you make an informed and secure decision on the key aspects you need to consider:

  • Verify if the cooperative is legal: Before joining a cooperative, ensure that it is legally constituted and registered.
  • Know if It is managed through a manager: Investigate whether the administration will be carried out through a housing cooperative manager and what their responsibilities are.
  • Request the statutes: Ask for a copy of the Statutes to know the internal rules of the cooperative.
  • Initial capital contribution: Prepare to make an initial contribution and make sure that the Statutes explain how to recover this amount if the project does not materialize.
  • Know the financing and payment plan: Being informed about the financing plan and the dates of the payments is essential.
  • Confirm your contributions: Make sure that your contributions are insured or guaranteed, even before obtaining the building license.
  • Verify the ownership of the land: Find out if the cooperative already owns the land or if it has a purchase option.
  • Request information about the project: Look for whether there is a basic project or a preliminary project already defined.
  • Know the timelines for execution and delivery of the houses.
  • Know your rights as a cooperative member: Once you become part of the cooperative, you will have a series of rights and will be able to access specific benefits.
  • How to withdraw from the cooperative: Learn about the processes and conditions for withdrawing from the cooperative, ensuring the recovery of your contributions.

How to know if a housing cooperative is legal?

Knowing the legislation is important. If you don’t review it, you might miss out on benefits like the Next Generation Funds for housing rehabilitation. In this regard, the possibility of knowing if a housing cooperative is legal comes into play. Cooperatives are governed by Law 27/1999. Here are the steps to follow to check if the cooperative you are interested in is legal.

  1. Check Registration in the Registry The first thing is to make sure that the cooperative is properly registered and has the authorization of the local authorities. For this, you must verify its registration in the cooperative registry of the corresponding autonomous community. Additionally, you can go to the Confederation of Housing Cooperatives (CONCOVI) for confirmation and advice.
  2. Documentation in order Investigate whether the cooperative has all its documentation in order, such as statutes and assembly minutes. Make sure it is complete and up-to-date. This step is key to understanding how the cooperative functions and is structured.
  3. Background and reputation Check if the cooperative has had legal problems or sanctions in the past. It is essential to know the manager’s background, and you can ask for references from financial institutions or the town hall. Remember that important decisions must have the approval of the members in the general assembly.
  4. Access to the bank account The cooperative must be transparent and accountable. All cooperative members should have access to the bank account where the fees are deposited, and the payment deadlines must be clearly established in the statutes.
  5. Financial security The members’ contributions must be protected, either through insurance or with the backing of a financial entity. This is crucial to avoid potential losses of money.
  6. You Have the right to a refund If you decide to leave the cooperative, you have the right to a refund of your money. However, it is important to differentiate between the money contributed to the social capital, which should be reimbursed, and the amounts allocated to cover the cooperative’s expenses. The money invested in the construction of the house will be returned to you when another member takes your place.
  7. Clarity in timelines and land ownership The timelines for building the houses should be clear and specified in the contract. It is also crucial to know who owns the land, ensure that it can be urbanized, and check whether the cooperative has an option contract, or whether the land is public or private.
  8. Learn from bad experiences Consider the bad experiences of other cooperators to avoid repeating them. There are financial and real estate entities that have created cooperatives to sell homes at a good price, but there are also cases of people who invested in projects that were never carried out.

What is a housing cooperative for older adults?

With the growing aging of the population, cooperatives for older adults are emerging as an innovative option, inspired by the cohousing model. This system allows older adults to share living spaces and services, fostering an environment of solidarity, active participation, and coexistence. In this setting, residents collectively manage the entity, making joint decisions about services, operations, and the design of the place, resulting in a safe, comfortable space tailored to their needs.

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Housing cooperatives for older adults are entities managed by the residents themselves, who make joint decisions about services, operations, and the design of the place. For example, residents of a senior cooperative might organize community yoga sessions in green areas, followed by a healthy breakfast in the shared dining room. Socialization is the goal, and recreational activities such as movie afternoons or art workshops are common.

Another point to highlight is the strategic location of these cooperatives, usually situated in central areas, allowing residents easy access to medical services, shops, and cultural activities. Some cooperatives, for example, are built near a health center and a cultural center, contributing to overall well-being.

Housing cooperatives for older adults offer a community living model, where members can enjoy their retirement actively, surrounded by mutual support in an environment that promotes autonomy and participation. The goal is to provide older adults with opportunities to stay active, sociable, and happy.

Examples of Cooperatives in Spain

There are many examples of cooperative housing in Spain that serve as references for new models. Here are some for you to get an idea of these types of homes in practice, and to see how another housing model is possible. They are private homes with a large number of common spaces allowing living in company and being closer to other neighbors than in a normal building block or urbanization. It’s like living with a large family.

Entrepatios Las Carolinas in Madrid EntrePatios-LasCarolinas

With 17 homes and 53 residents, Entrepatios-Las Carolinas is one of the collaborative housing developments in the Madrid neighborhood of Usera. A ‘CO2-neutral’ building, with a wooden structure and almost zero energy consumption. This project was born in Madrid in 2017, carried out by the specialized manager COHOUSINGVERDE.

The owner members are very committed to social and environmental ecology. The most notable part of this project has been the common areas. They have a laundry room, parking for 67 bicycles, patio, kitchen, and common dining room on the top floor of the building so that owners can interact with each other, beyond coinciding in the stairs or pool.

The building is constructed according to the Passivhaus standard, a type of construction that aims to minimize energy demand, avoiding heat and cold losses through a high degree of insulation and airtightness of the building.

Cohousing Aflorem in Badalona Aflorem-Badalona


This project is an initiative of a group of people with functional diversity and multiple sclerosis. To join this cooperative, it was necessary to accredit a physical disability or be over 65 years old.

Each member of the cooperative enjoys their private home and extensive community spaces adapted to the desires and needs of the group, favoring both personal autonomy and social integration. For example, a gym with a physiotherapist and a heated pool for necessary health exercises.

Residential Puerto de la Luz, Málaga

Residencial Puerto de la Luz

This housing cooperative is a residential for older adults in Málaga. It consists of 60 apartments of 50 square meters with large terraces of 12 meters.

The common areas include a laundry room, gym, hair salon, emergency generator, and individualized attention.

As you can see, housing cooperatives are already a reality that we can all enjoy in a future that is already here. The advantages are many, as you can see throughout this article.


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