Property division in the divorce

For married couples, their own property is not only the center of their lives, but also a significant asset when it comes to retirement provision. Divorce is a correspondingly emotional affair when it comes to the fate or division of the property. Many couples are at a loss as to what to do with their property.

Deciding what to do with a property during and after a divorce is not easy. Especially if the property is still encumbered with debts. In such a situation, action must be taken quickly and at an early stage. Legal experts therefore recommend finding an overall solution right at the beginning of the separation.

Financial analysis is necessary

In order to find a solution, you first need to analyze your finances. Couples who are separating first need to know how much their property is worth. A regional professional estate agent can help determine the fair market price. But that's not all. The payment obligations must also be recorded in full in order to be able to draw up a profitability calculation taking into account the consequences of the separation. This includes, for example, how much maintenance is to be paid and whether any benefit of use must be taken into account. Only once these questions have been clarified can an answer be given as to whether one of the ex-partners can take over or maintain the property.

Sale as a last resort

If it then turns out that neither partner can keep the property after the divorce, the only remaining solution is to sell the property. Because if the ex-partner has to be paid out and at the same time monthly installments are due to the bank, this is often unaffordable. Even if the property is rented out, the co-income may not be sufficient.

If the divorcing spouses are then unable to agree on a rational sales strategy, they may end up with a distress sale or a partition auction. However, these are the worst possible solutions and usually lead to major financial losses.

In principle, however, there are advantages to selling. In order to divide the property fairly, it is often easiest to convert it into more easily divisible assets - i.e. money. The two ex-partners can then pay off their debts to the bank and there is often enough capital left over for a fresh start. A professional estate agent is familiar with such cases. They know how to proceed in order to sell the property at a fair market price in a short space of time.

However, it is important to clarify with the bank in advance whether an early repayment penalty must be paid for the redemption of the property loan. The ex-partners should also check whether taxes may have to be paid on the sale of the property. However, this is not the case for owner-occupied properties.

Would you like to know what the best solution is for your divorce property? Get in touch with us! We will be happy to advise you on your options.

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https://de.wikipedia.org/wiki/Ehescheidung_(Deutschland)

https://de.wikipedia.org/wiki/Teilungsversteigerung

https://de.wikipedia.org/wiki/Vorf%C3%A4lligkeitsentsch%C3%A4digung

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

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