Property in a divorce? – How to successfully divide it

In a divorce, emotional upheaval isn't the only major issue; the financial challenges often push both ex-partners to their limits, especially when jointly owned property is involved. Are there fair ways to divide assets?

In divorce proceedings, disputes over jointly owned property can escalate. If a mortgage is still outstanding, the former partners can either continue it together or pay it off early. If no agreement can be reached, a forced sale by auction is likely, which often results in financial losses. Furthermore, tax implications such as capital gains tax and real estate transfer tax must be considered when selling the property.

Matrimonial property regime and division of assets in a divorce

In a marriage without a specific prenuptial agreement, the default property regime is community of accrued gains. Assets acquired before the marriage remain private, while assets acquired during the marriage belong to both partners. In the event of a divorce, the initial and final assets are compared, and the partner with the greater increase in assets pays an equalization payment. Jointly acquired real estate is divided, while inheritances such as inherited houses are excluded from the equalization of accrued gains.

Real estate options in a divorce

• Sale: After deducting any outstanding loan liabilities, the proceeds from the sale will be distributed equally.
• Real division: The house will be converted into two independent residential units, if possible.
• Joint right of residence: Both partners continue to use the house, but live separately from each other.
• Partition auction: If no agreement can be reached, the house may be auctioned off.
• Partner's right of residence: One partner lives in the house rent-free, which is taken into account when calculating maintenance payments.
• Takeover by one partner : One partner takes over the house and compensates the other according to the current property value less any outstanding debts.
• Rental : The property remains jointly owned, and the rental income is shared.

Options and procedures for dividing real estate in divorce cases

The house's value is determined by subtracting the outstanding debt from the market value, and the partner paying out assumes half of this value. An independent appraisal creates a fair basis for negotiation. In the case of joint loans, the bank must approve the transfer, or the partners must continue to make joint payments on the loan, often incurring a prepayment penalty.

If you decide to sell your property, the support of an experienced real estate agent can be beneficial. A professional can significantly simplify the sales process by assisting with marketing, price negotiations, and all formal aspects, acting as an intermediary.

If you have any questions or would like assistance with the sale of your property, we, as experienced real estate agents, are happy to help. Together, we will develop the optimal solution for your situation.

Notes

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

Photo: © Wordliner/Image created with OpenAI's DALL·E.