When you decide to divorce, the future of your home is one of the most important matters you have to arrange. The home is not only a valuable asset, but also a place that has emotional value. Will you continue to live in the house, or will you decide to sell the house? To make the right decision, it is important to carefully map out a number of things. In this article we share useful tips and important information about what to expect.
1. Who owns the home?
A first step is to determine who officially owns the home. This may differ per situation, depending on the moment of marriage or entering into a registered partnership. For marriages and registered partnerships before January 1, 2018, without prenuptial agreements or partnership conditions, both partners are 50% owners. This also applies if the home was purchased by one of the partners before the marriage. The situation is different for marriages after January 1, 2018: the person who purchased the home before the marriage or partnership remains the full owner.
2. Who will continue to live in the home?
If children are involved in the divorce, it may be attractive to remain in the home so that the children can remain in their familiar environment. However, it is important to take the financial burden into account. If there is excess value, the partner who continues to live must buy out the other. This can significantly increase monthly costs, especially with rising mortgage rates in recent years. It is important to check 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. Take into account the costs of an appraisal, which vary between €500 and €1,000.
4. Can you buy out your partner?
In the event of excess value, both partners are entitled to 50% of this value. If one of the partners continues to live in the home, they must buy out the other partner. This can be done through your own resources or an increase in the mortgage. New interest rates and conditions may apply, which may affect the monthly costs. It is important to carefully map out 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 consequences. That is why it is wise to engage 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, for example, 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 may be able to save taxes. However, it is important to thoroughly investigate whether this is wise for your situation.
Need advice?
During a divorce, you face many important choices, especially when it comes to the home. Do you want to know what the best option is in your situation? Contact one of our lawyers. We are happy to help you make the right decisions, both emotionally and financially.