When you decide to get divorced, the future of your home is one of the most important matters you need to arrange. The home is not only a valuable asset, but also a place with emotional value. Will you stay in the house, or will you decide to sell the property? To make the right decision, it’s important to clearly map out a number of things. In this article, we share useful tips and important information about what you can expect.
1. Who owns the home?
A first step is to determine who is officially the owner of the home. This can vary per situation, depending on when you married or entered into a registered partnership. For marriages and registered partnerships before 1 January 2018, without a prenuptial agreement or partnership agreement, both partners are 50% owners. This also applies if the home was purchased by one of the partners before the marriage. For marriages after 1 January 2018, the situation is different: the person who bought the home before the marriage or partnership remains the full owner.
2. Who will stay in the home?
If children are involved in the divorce, it may be appealing to stay in the home so the children can remain in their familiar environment. Still, it is important to take the financial burden into account. If there is positive equity, the partner who stays must buy out the other. This can significantly increase the monthly costs, especially with the rising mortgage interest rates of recent years. It is important to carefully assess in advance whether it is financially feasible to stay in the home.
3. What is the current value of the home?
If one of the partners wants to take over the home, the current market value of the home must first be determined. This can be done by an appraiser or real estate agent. It is wise to make clear agreements about this so that both parties agree on the valuation. Keep in mind the cost of an appraisal, which ranges between € 500 and € 1.000.
4. Can you buy out your partner?
In the case of positive equity, both partners are entitled to 50% of this value. If one of the partners stays in the home, they must buy out the other partner. This can be done using personal funds or by increasing the mortgage. New interest rates and terms may then apply, which can affect the monthly costs. It is important to clearly map out the financial consequences of a mortgage increase.
5. What are the tax implications?
Buying out a partner or taking out a new mortgage can have tax implications. That’s why it’s wise to hire a tax advisor who can help you make the right decisions. This way you avoid unexpected surprises with the tax authorities.
Bonus tip: transfer to children
In some cases, both partners want to leave the home. In that case, it may be an option to transfer the home to the children. This can be done, for example, at the WOZ value instead of the higher market value, which can provide tax benefits. By selling the home to the children at the WOZ value, they may be able to save on taxes. However, it is important to carefully assess whether this is advisable for your situation.
Need advice?
A divorce brings many important choices, especially when it comes to the home. Want to know what the best option is for your situation? Contact one of our lawyers. We’re happy to help you make the right decisions, both emotionally and financially.
