Feature article of the month: what unmarried couples should absolutely consider when buying real estate

Millions of couples in Germany live together without being married. While this may have many advantages, there are several things to consider when jointly purchasing real estate to ensure that neither partner is disadvantaged in the event of a separation or the death of one partner.

While married couples typically live under a community property regime, unmarried couples have no legal certainty and therefore no equalization of assets. A partnership agreement or the formation of a civil law partnership (GbR) can prevent problems and save a lot of trouble.

As a general rule, ownership is determined by the entry in the land register. Therefore, both partners should have their names entered in the land register. If they have contributed different amounts to the purchase, instead of a 50/50 split, a shareholding ratio of two-thirds to one-third or, for example, 90 to 10 percent can be registered.

Partnership or shareholder agreement

Further arrangements for the event of a separation can then be agreed upon in a notarized partnership agreement or in the partnership agreement of a GbR (general partnership). This can stipulate whether the property is to be sold, who must move out if the partners separate, and how much compensation the partner retaining the property must pay the other. The agreement also regulates how any work contributed by a partner in the construction or renovation of a property will be taken into account.
Finally, to prevent a decrease in the property's value due to a forced sale, the agreement should consider the interests of both partners as much as possible. Therefore, it is advisable to consult a notary at an early stage.

Inheritance agreement and lifelong right of residence

Among the eventualities to consider is the death of one partner. If there is no will, the deceased's biological children or their parents inherit their corresponding share of the property. Even if the partner is named in the will, close relatives are entitled to a statutory share – unless they voluntarily waive it. This statutory share amounts to half of what they would have received without a will. That is to say, if the deceased partner owned half of the property, the heirs receive a quarter.
The tax authorities also take a significant share of the inheritance from unmarried couples. While the inheritance tax allowance for spouses is €500,000, the surviving partner is only entitled to an allowance of €20,000.

Our tip: A lifelong right of usufruct on the property allows the surviving partner to continue using it exclusively, even if relatives are co-owners. This also helps avoid inheritance tax.

Sources: anwalt.de, ratgeber.immowelt.de, nanz-frage.net, anwaltsauskunft.de, wz.de, haufe.de