How you can protect yourself financially after a divorce
Divorce with house
Regulations, solutions & tips for equalizing profits with the house
If you are married and divorce without a prenuptial agreement, the question quickly arises what happens to the house during the divorce. In the following, you will find out which regulations exist for the equalization of profits with a house, how you can proceed and which real estate tips there are for couples who are getting divorced.
Table of Contents
the essentials in brief
- The equalization of profits in the event of a divorce regulates that financial situation between both spouses. This also includes real estate.
- A prerequisite for a gain compensation in the event of a divorce is, among other things, that between the two spouses or registered partners no marriage contract has been closed.
- In principle, not all real estate assets are subject to the profit adjustment, only the Asset growth between marriage and divorce. In the case of a property inheritance or gift, only the increase in value is offset, but not the property inheritance or gift itself.
- For the Calculation of the profit compensation for a house, the initial wealth must be deducted from the final wealth during the marriage. The rest is then halved.
- The Market value appraisal a sworn and publicly appointed real estate appraiser offers you reliable information about how much your property is worth.
Divorce with house: who will get the house after the divorce?
Who gets the house after the divorce depends, among other things, on the ownership structure.
Who is the owner of the house?
When it comes to what happens to a house after the divorce, the most important thing is who owns the house. So: Who is in the land register entry as the owner.
There are two options:
- Only one spouse is the owner: In this case, he or she will own the house even after the divorce. The ownership structure does not change.
- Both spouses are owners: In this case, both spouses have a legal right to the house. How the situation is resolved depends on whether or not the spouses can come to an agreement.
Tip: If you do not know who is registered as the owner in the land register, you can request an extract from the land register.
Is it possible to bypass property gain sharing in the event of a divorce?
It is only possible in the following cases to bypass the equalization of gains for a property in the event of a divorce:
- At marriage, you have one Marriage settlement closed, in which the equalization of profits is excluded and it is determined who keeps what in the event of a divorce.
- Neither spouse requests the profit sharing.
- The equalization of profits can be made with a very brief marriage not applicable: This only occurs if one of the spouses applies for it.
- Finally, there is also the modified profit sharing: It is stipulated in a marriage contract that the equalization of profits only becomes effective after a certain period of marriage or after the birth of a joint child. It is also possible to contractually exclude certain items, such as a spouse's business assets, from the profit sharing.
If none of the above conditions apply, you will not be able to bypass the property gain in divorce.
Is there a right of residence in the case of a divorce with a house?
There may be a right of residence in the event of a divorce with a house, but it does not have to be. In particular, it depends on the specific circumstances of the divorce with a house.
A right of residence in the case of a divorce with a house exists in the following cases:
- In the case of sole ownershipif the non-owner can prove that he or she could not find any new accommodation for himself or the offspring that would be reasonable.
- If both spouses Owners of a common property of course, both spouses also have a right of residence for the property.
Is there a statute of limitations for the profit compensation?
Yes, the entitlement to profit compensation Statute of limitations after three years. This applies in particular to couples who cannot finally agree on the profit sharing. This means: If the competent court does not regulate the compensation of profits three years after the divorce, the claim expires.
The right to a gain adjustment for real estate in the event of a divorce expires after three years.
Definition: What are community of gains and equity of gains?
According to German law, if two people marry or decide to have a registered civil partnership and have not signed a notarial contract, they live in one Community of profits (§§ 1363-1390 BGB). Specifically, that means that the respective capital both spouses or partners Cut stay and neither spouse has to pay the debts of the other. This is only the case if both spouses have taken on debts together or vouch for each other.
However, if the divorce is filed, there is no marriage contract and the legal matrimonial property regime ends, it comes to Gain compensation. That is to say, there is one Comparison of both assets of the divorce parties comes. The two spouses then compare how their individual assets have changed. The exact amount of gain is determined by adding the Initial fortune (Assets at the time of marriage) from Final fortune (Assets at the time of the divorce filed) is deducted. The spouse with the higher profit then has to pay half of it to the other spouse.
Tip: In order to determine which course of action to take, it is crucial who is the owner of the property. To find out, you need to request an extract from the land register.
Who pays back the loan in the event of a divorce with house?
If you have taken out a joint real estate loan, this is also subject to the profit adjustment. We explain below how the profit compensation works in the event of a divorce with a house in debt.
Basically: The person who is registered as the borrower is liable for the loan.
- Is only one spouse registered as a borrower, only he or she is legally obliged to pay off the loan. If your spouse took out the loan to finance the house before the marriage was concluded, you do not have to participate in the repayment. Your marriage does not automatically result in you entering into your spouse's existing loan agreement. A separate contract is required for your co-obligation to repay a loan or credit.
- However, as a rule both spouses registered as a borrower to pay off the common house. In this case, both spouses are also obliged to repay the loan. This also applies if a spouse moves out because of the divorce.
In principle, there are several options if you have taken out a loan together as the spouse:
- If only one spouse keeps the common house, you can Pay off installments together. In this case, the partner who does not keep the house has the option of the costs on the separation maintenance credit to leave, if there is one.
- Arrange that only one spouse pays off the loan, you must first obtain the consent of the bank. As a rule, the bank will use one in this case new contract and demands the payment of a so-called Prepayment penalty: This is a compensation amount for the early termination of the old loan agreement.
Then the partner who has moved out and pays the others, deleted from the land register. This means that the property has only one owner, the other spouse. You commission a notary to adjust the entry in the land register.
Tip: It is best to agree in advance with your spouse on who will pay the early repayment penalty or in what proportions.
There are two ways you can go about divorce with home loan.
Loan repayment and land charge for mortgage lending
Is there a joint loan for one Mortgage lending and both spouses are listed as owners in the land register, both are also liable after divorce for repayment. This also applies if only one spouse has signed the contract.
With the consent of the bank, you can use a Release from custody agree upon divorce. This means that a borrower takes over the ownership share and thus also the debts of the ex-partner. However, the bank will only agree to this if the new sole owner can financially repay the loan.
The mortgage lender is usually a Land charge Enter in the land register of the financed property. This is how the bank ensures that right in remto demand payment of a certain amount of money from the property. If the repayments are no longer made, the bank can therefore dispose of the property in order to get its money back. First, however, it will agree to a reduction or suspension of repayments or a deferral of the installments. If this does not help, the payment arrears often lead to a Foreclosure. When this happens, the claims of the creditors are served according to the order of priority entered in the land register.
In the case of refinancing or follow-up financing, as can occur in the context of a divorce, the Land charge deleted become. The new lender can register a new land charge. Cheaper than this process is a Assignment of land charges from the previous lender to his successor. Only after the loan has been fully repaid will the bank issue a cancellation permit for the land charge.
Loan repayment with guarantee
The situation is different if only one spouse has taken out the loan, but the other spouse has taken out one guarantee has secured. Even after the divorce, the surety is liable for the credit debts of the former spouse. If the ex-partner no longer fulfills his payment obligation, the financial pressure weighs on the guarantor, who has to continue paying off the loan.
It is advisable to have a breakup as part of a breakup Release from custody to agree. This protects the surety from paying for the divorced spouse's payment obligations even though he no longer owns the house. Since the remaining borrower is already jointly and severally liable for the loan, a new contract is not necessary, but one Credit check.
What happens to the house in the event of a divorce if both spouses are owners?
If, in the case of a divorce with a house, both spouses are registered as owners in the land register, there is various possibilities. It all depends on which procedure both spouses agree on.
Option 1: Transfer of ownership & payout
If both spouses agree about it Some are who should keep the property and who pays the others is who Transfer of ownership Quite easy to understand: Both spouses are looking for one together notary and have them certify that one partner hands over his co-ownership to the other partner.
Important: Before you carry out a transfer of ownership, you should clarify maintenance issues and also the compensation of profits. Because the transfer of ownership has Consequences:
- Those who take over the property, on the other hand, do not have to pay rent, which means that the disposable income is higher, which affects the Maintenance claims can affect.
- Whoever hands over the property receives a large sum that affects the final assets and thus the Gain compensation affects.
- With an ongoing home loan you should be careful to get completely out of it liability to be released. To do this, you must obtain the written consent of the respective credit institution prior to the notarization.
If you have both spouses, you should study the various options that you can take with your house in the event of a divorce.
What happens to the land charge in a house divorce?
The spouse who takes over the house and pays the ex-partner should take care of the property debt discharging to take over. This means that a land charge entered in the land register or other liabilities that still have to be repaid are taken into account in the payment in the remaining amount.
The spouse who keeps the house releases the outgoing spouse from the liabilities. The ex-partner should be deleted from the land register and released from loan agreements. The accepting spouse pays the market value after deducting the assumed debt out.
By the way: If a spouse has taken out a land charge on their own property in order to secure the spouse's loans, they can according to the judgment of the Federal Court of Justice after a divorced marriage
- an amortization schedule,
- a reimbursement of expenses according to the rules of contract law
- or the exemption from these liabilities
What if one partner cannot pay off the other partner?
House divorce payouts are usually associated with large amounts. It is therefore important that the person who wants to take over the house realistically calculates whether they are the Payout can afford, including the running ancillary costs for the house.
Usually you can credit take up at a bank and use the house as collateral. There is also the option of using the Amount for the payout with the profit compensation or maintenance payments offsetting or one Deferral to be agreed, i.e. payment at a later date. Whether that is possible is A matter of negotiation between both partners.
The following steps should be taken when planning a transfer of ownership:
- Make the transfer of ownership before or during the divorce:
In this way you can avoid the real estate transfer tax, which is normally due when you change ownership.
- Agree on the amount of the payout and payment methods:
The spouse who takes over the property in full must pay the other spouse. For this, both spouses should agree on a price beforehand and determine the payment modalities, for example the payment deadline.
- Have the land register entry changed:
As soon as the notarization and payment have been completed, the notary applies for a change of ownership in the land register.
- If necessary, have the contracts adjusted:
As soon as the change of ownership is complete, you should have the contracts for electricity, water and gas adjusted in case you run into the paid spouse.
Tip: In such a case, it makes sense to have a so-called market value appraisal drawn up. This offers you reliable and legally binding information on the value of your property. In this way you can be sure that you are not agreeing to an excessively high or too low amount for the payout and that you are setting a fair price.
Option 2: real division
Another option, which rarely occurs, is to have the shared home remodeled so that two separate units arise. Both partners then become too Sole owners one of the two units.
The advantage This means that either both spouses stay in two separate units or can sell or rent their respective part of the property independently of the other spouse. The disadvantage a real division is that this is associated with costs for the renovation and remeasurement of the property.
In addition to reaching a mutual agreement, the following must be requirements be fulfilled for a real division:
- You must adhere to the building codes:
The planned real division including the necessary modifications must comply with the building regulations and the specifications of the development plan.
- You may need to obtain approval from the bank:
If you have an ongoing loan, the lending bank must agree to the split.
Important: If, for example, a plot of land is not large enough that it still meets the prescribed minimum size for a building area after division, real division is not possible. In this case, the ideal division is a possible alternative.
In the case of a divorce with a house, not every piece of land allows a real division.
Legally speaking, these are the following steps required for a real division:
- You need to have the property re-measured:
To do this, you must jointly commission a publicly appointed surveyor. The number of floor areas and, if necessary, the number of floor areas must be transferred to the units to be separated.
An architect, on the other hand, prepares the distribution plan.
- You have to apply for a new land card:
As soon as the survey has been completed, you must apply for a new cadastral map at the responsible land registry and surveying office. This defines the location of the property and the permitted development.
- You have to have the entry in the land register changed:
As soon as the original parcel (the property) has been divided up and a new land map is available, the division can also be legally implemented in the land register. To do this, go to a notary and arrange for a new entry in the land register. In addition, the real division is implemented by means of a declaration of division.
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Option 3: Ideal division
Whereas in the case of a real division, new property boundaries and different driveways are visible, is one ideal division not necessarily recognizable from the outside. Because in this case the property remains as it is. Only the house is divided into two different units. Therefore, the ideal division is particularly suitable for Semi-detached or terraced houses.
If the appropriate conditions are met, an ideal division can also be implemented in single-family houses. However, in this case both spouses form a so-called Community of owners: That means that both as co-owners are equally responsible for the entire property and its management. But that also means that both spouses still in contact after the divorce have to stay. Therefore, you should weigh carefully whether this option is an option for you.
You can then choose the ideal division as a solution if there is a Do not divide the property into individual units without violating the building regulations or requirements of the development plan.
- You have a notarized declaration of division drawn up:
If you and your spouse have agreed on an ideal division, you must first have your rights and obligations notarized in a declaration of division in accordance with the Home Ownership Act (WoeigG for short). It is important that the declaration of division stipulates that each owner is independently responsible for the repair and maintenance of his property: you do not need the consent of your divorced spouse for a sale and you can encumber the property independently.
- You are responsible for the property that becomes your property:
As a result of the declaration of division, two properties were created. You can cultivate and manage your own without the consent of your spouse. You will also receive your own land register sheet for your property.
You will receive your own land register sheets.
Anja and Mario V. are getting a divorce. Both are owners of a single-family house with two floors. You want to divide the house into two condominiums. To implement this plan, they initiate renovations that separate the floors from each other and create two different entrances to the respective units. In this way, both can live independently on the property, sell or rent the apartment. Both are now co-owners of the property and are therefore also responsible for its management. In this case there is no division of the property, which means: Both Anja and Mario are noted as owners in the land register entry.
Option 4: Selling the common house
If both spouses cannot agree or neither can pay off the other, one solution is to share the house to sell.
When selling a house together, the spouses divide the profit according to the ownership shares.
Both spouses want to sell the property and can rely on one Minimum sale price some.
If you decide to sell your common property in the event of a divorce, proceed as follows:
- You commission an appraisal of your property:
With the market value appraisal of a sworn and publicly appointed real estate appraiser, you will receive legally binding information on how much your joint property is worth.
- You can find a buyer for the property:
You can either find a buyer for the shared property yourself or hire a broker to sell it. The advantage of the latter option is that you can turn the task off to a professional and reduce contact with the current spouse.
- You have the transfer of ownership carried out by a notary:
As soon as you have found a suitable buyer for your property and have agreed on a sale price, have the property sold with the notary. This also takes over the change of the land register entry. You then share the sales proceeds with your spouse on a pro rata basis.
By the way: In our guide "Costs when selling a house" you will find an overview of all the costs that you will have to face when selling a house, including an example.
Tip: Our real estate sales advice offers you reliable and profit-oriented assistance for the sale of your house during the divorce. Upon request, we will then also sell your property to a qualified prospect.
Option 5: rental
Of advantage is the rental of the common house especially if you have taken out a loan: in this case, the credit keep running and you can repay it with the rental income. In this way - unlike when selling a house - you avoid the bank's right to early repayment penalty: This is a payment that you have to make if you have to terminate the loan early. In addition, there are no costs for changing the land register entry, which are incurred with some other solutions.
If you decide to rent out the house, both spouses will remain the owners of the house. However, the prerequisite is that both partners are in agreement and can introduce themselves, also in the future jointly responsible for the property to be.
If you decide to rent together, you should initiate the following steps:
- Clarify together how you envision the rental.
This includes what requirements a tenant should meet, whether you want to hire a broker and what exactly should be in the lease.
- Hire a joint property manager.
He takes care of all matters relating to the property for you. If you do not want that, you should agree with each other who will prepare the utility bill for the tenant once a year and who will be available as a contact person for the tenant.
Option 6: Donation to a common child
If your child is already grown up and can use the house themselves and also pay for the costs, there is also the option of transferring the house to a child together during the divorce.
So that you can transfer the house to your child, this must be the Of legal age achieved. If your child is still a minor, a guardianship court must approve your project. This solution should be thought through carefully. Because with the property, your child also receives all the rights and obligations that come with it.
Important: As long as the divorce has not yet been legally consummated, neither spouse may sell or give away the common property without the consent of the other spouse. This also applies if you want to give them away to children together.
By the way: In the case of a gift, you can only give the property tax-free if the value of the property does not exceed the tax-free allowances for a gift (400,000 euros per parent in this case). You can find saving tips for donating your property in the guide "Gift tax on real estate: 4 saving tips for your gift".
If both spouses are the owners of the property when you divorce, you can transfer it to one child together.
If all family members agree that a transfer of the home to one or more children is desired, have a corresponding contract drawn up by the notary. By doing Transfer Agreement it is usually not only stipulated that ownership passes from the parents to the child, but there can also be, for example, a right to housing for one parent or, under certain circumstances, a right to repatriation.
A transfer agreement contains the following information, among other things:
- Contact details and date of birth of those involved
- Reason for the release
- Land register status
- Assumption of costs
- Any consideration or conditions for the new owner
- Right of use of the property
- Inheritance law regulations
- place and date
Option 7: division auction
If you cannot come to an agreement with your current spouse on the best way to deal with the property sharing, one of the spouses can apply for a division auction.
Important in advance: As a rule, the market value (the realistically achievable selling price on the open market) is far from being achieved in a division auction. A division auction is therefore usually associated with considerable losses. Therefore, you should only choose this option as a last resort.
The division auction can any owner the corresponding property apply for, even without the consent of the other owner. They do, however more than 90% of the property one of the spouses, the other cannot apply for a division auction.
Any Land chargethat weighs down on the property should be paid in advance of the division auction. The lowest bid in the case of a division auction, the registered land charge is in full. If the land charge is higher than the market value that is set for the division auction, no buyer will be found.
Submit the application for the division auction for a house in the event of divorce to competent district court a. It does not matter to which shares the property belongs to you. Because anyone who owns a part of the property is eligible to apply.
You submit your application together with the following documents:
- Information about you as the applicant
- Names and addresses of all co-owners
- Exact designation of the property
- Land register extract of the property to be auctioned (not older than 6 months)
If you have submitted all documents in full and there are no objections, the district court will initiate one Foreclosure notice in the land register.
In addition, the spouse who did not submit the application will informed about the division auction. Within two weeks In this case, he or she has the opportunity to raise an objection and justify it. A permissible reason would be, for example, if the living conditions of the children were significantly impaired by a division auction. Now there are two options:
- The court agrees with the objection: If the court approves the objection, it temporarily suspends the proceedings for six months. After this period has expired, a new examination takes place.
- It comes up for auction: In this case, an appointment will be made on which your property will be offered to the public for auction. The appointment usually takes place around a year after the procedural decision.
By the way: As the owner, you can also take part in such a division auction.
The costs for the process of the division auction are finally deducted from the proceeds of the property. The remaining amount is shared by both owners. If the applicant withdraws his or her application, he or she has to bear the costs incurred up to now.
Income equalization at the house: One spouse is the sole owner
If the house where you and your spouse live or have lived together is only owned by one person, the property will remain that person's property even after the divorce. Nevertheless, it is usually subject to the profit sharing.
Prerequisite for the equalization of profits in the case of sole ownership
The basic rule is: As soon as the value of the house has risen during the marriage, the amount of the increase in value (i.e. the gain) is subject to the gain compensation. This also applies to houses in sole ownership.
A property usually increases in value when one of the following applies: When the house is used during the marriage
- or modernized
has been. Both at the Expansion as well as modernization does not matterwhether the house is the owner heard before marriage. Nor is it taken into account in the compensation of profits who paid the costs.
By the way: Usually the owner keeps the property even after the divorce, but there are also cases when this is not the case:
- The court can order that the other spouse (non-owner) may live with the children in the property if he can prove that he cannot find an affordable apartment for himself and the children. However, this does not change the ownership structure, the spouse only receives a right of use.
- Both spouses mutually agree on a solution.
If a spouse is the sole owner of a property, the gain in property is compensated for during the duration of the marriage.
Procedure & example for the calculation of the profit compensation for sole ownership
You can find a helpful example and a specific calculation of how the gain compensation for a property in sole ownership is carried out in our guide “Gain compensation for sole ownership: Everything you need to know”. Here you can also find out all the details you need to know about the legal situation when it comes to the compensation of profits from sole ownership.
Tip: In order to determine the amount of the increase in value, a legally binding market value appraisal is required, which must be issued by a sworn and publicly appointed real estate appraiser. Our real estate appraisers will be happy to prepare one for you. This will give you information about how much your property is currently worth and what increase in value there is.
This is how the profit compensation works for an inherited or gifted house
Basically: In the event of a divorce, an inherited house is not subject to the equalization of profits. But there are also cases in which the profit sharing is effective.
When a spouse has inherited or gifted a house and he or she has it during the marriage expanded or modernized only the increase in value is subject to the gain adjustment. A property that a spouse received during the marriage is therefore generally not subject to the gain adjustment in the event of divorce.
In this case, the procedure and the calculation of the equalization of profits are the same as the equalization of profits in the case of sole ownership.
Tip for divorce with a house: A market value appraisal creates clarity
Legal proceedings such as divorce with a house or apartment, which have far-reaching existential consequences, should be prepared as well as possible and designed to your advantage. A reliable market value appraisal can provide you with the best possible support. You can commission this together with your spouse or you can commission one certified and publicly appointed real estate appraisers independently with it. Unlike when you hire a freelance expert, you will receive one judicial assessment for the profit sharing of the property in question.
By the way: Our certified real estate appraisers are throughout Germany in use and take Real estate valuations exclusively on site to get the most accurate results possible. We always leave your calculations to another expert according to the Four-eyes principle examine to your advantage and provide you with an expert assessment within short time.
Get your free and non-binding initial consultation: Contact us at Call 0800 - 90 90 282 Or just use our contact form. We look forward to your inquiry and will get back to you as soon as possible!
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