When you decide to divorce, the future of your home is one of the most important matters to arrange. The home is not only a valuable asset, but also a place with emotional value. Do you stay in the house, or do you decide to sell the property? To make the right decision, it is important to map out a number of matters. In this article, we share useful tips and important information about what you can expect.
1. Who owns the property?
The first step is to determine who officially owns the property. This can vary per situation, depending on the time of marriage or entering into a registered partnership. For marriages and registered partnerships before January 1, 2018, without prenuptial or partnership agreements, both partners own 50% of the property. This also applies if the property was purchased before the marriage by one of the partners. For marriages after January 1, 2018, the situation is different: the person who purchased the property before the marriage or partnership remains the full owner.
2. Who stays living in the property?
If children are involved in the divorce, it can be attractive to stay in the house so that the children can stay in their familiar environment. However, it is important to take financial burdens into account. If there is surplus value, the partner who stays living in the property must buy out the other. This can significantly increase the monthly costs, especially with the rising mortgage interest of recent years. It is important to check in advance whether staying in the house is financially feasible.
3. What is the current value of the house?
If one of the partners wants to take over the house, the current market value must be established first. This can be done by an appraiser or real estate agent. It’s wise to make clear agreements about this, so both parties agree on the valuation. Consider the costs of a valuation, which vary between € 500 and € 1,000.
4. Can you buy out your partner?
With surplus value, both partners are entitled to 50% of this value. If one partner remains living in the property, they must buy out the other. This can be done using personal resources or an increase in the mortgage. This can bring new interest rates and conditions into effect, which can affect monthly costs. It is important to map the financial consequences of a mortgage increase.
5. What are the tax consequences?
Buying out a partner or taking out a new mortgage can have tax implications. Therefore, it is advisable to hire a tax advisor who can assist you in making the right decisions. This way, you prevent unexpected surprises with the tax authorities.
Bonus tip: transferring to children
In some cases, both partners want to leave the house. In that case, it may be an option to transfer the house to the children. This can be done at the WOZ value instead of the higher market value, which can bring tax benefits. By selling the house to the children at the WOZ value they might save tax. However, it is important to examine well whether this is wise in your situation.
Need advice?
With a divorce, a lot of important decisions come your way, especially when it comes to the house. Do you want to know what the best option is in your situation? Get in touch with one of our lawyers. We are happy to help you make the right decisions, both emotionally and financially.
