Every year, between 31 and 35 thousand couples divorce in the Netherlands. According to the Central Bureau of Statistics (CBS), there is a 40% chance that a marriage will fail! So what should you consider with your joint home when you get divorced. In short, there are 2 options:
- You sell the property and each start looking for new housing
- One partner buys out the other partner
Option 1 – sell the property
When selling your home, it is wise to first invite 2 or 3 different real estate agents for a no-obligation valuation and to make a sales proposal.
On the background, it is important to already be busy finding new living arrangements for both. Depending on how turbulent the situation is, is it may be wise to find some breathing room in temporary housing. The need for this is so great that in Haarlem there is even a real divorce hotel has been developed under the name NexT that specifically for divorcing people temporary provides housing to enable order to be restored. Whatever you do, start really on time with arranging new housing. It will be very much against your will in being and feeling emotionally charged, but don’t put enough energy into this then you run the risk that it will take too long and it will end up taking a lot of tensions. Make sure the sale takes place when the property is still nice and completely furnished and is not already half empty in terms of furniture. That Works detrimentally in sales.
If your broker sell the home, think carefully about the completion date. The faster the transport at the notary, the sooner you will no longer have the mortgage charges have. But if you are too quick, you run the risk of soon being temporarily at your parents have to knock on your door for a room. Actively involve your broker in this process and have him constantly advise you in all steps.
Is the property sold then the notary will use the sale proceeds to pay off your mortgage debt. Anything left over from the sale proceeds is called “excess value. The portion that you and your partner receive from this surplus value will be sent to ownership ratio calculated. You are both fiscally responsible for Your own share of the surplus value. Are you going to buy a new home within 3 years, then you have to go and put this surplus value directly into your NEW HOME. If you do not do this, then you are NOT entitled to a mortgage interest deduction. This is called the ‘top-up scheme’.
Delivers you home, however, yields less than the outstanding mortgage debt? Then we speak of “undervaluation. After the sale, there is a residual debt that you must share together. If you have taken out a mortgage with National Mortgage Guarantee, it may be That this residual debt be forgiven.
Option 2 – buy out an ex-partner
To know if this is an option you need to know 2 things:
- Does your partner agree? Is he/she cooperating?
- Can you pay the mortgage charges on your own?
If all of that is right, then again the first piece of advice is that the departing partner will move into replacement housing as quickly as possible arrange. Again: if this takes too long and you have been living together for too long, then a good intercourse turn into a nasty one. Is it the case that you have none of both want to move and each of you can easily pay the charges, then it is often arranged so that the one who is willing to spend the most money is pay and can do so, buy out the other.
What does that buyout entail?
Buy-out means that you buy over your ex-partner’s share of the home and the associated mortgage debt. You determine the value of the home by having the home appraised. The appraiser then determines the “sales appraisal value” of the home in an unoccupied state.
How it works
You are married in community of property and you buy out your partner. Your house is valued at € 400,000 Your remaining mortgage debt is € 200,000 The excess value is then € 200,000 of which 50% belongs to your ex. You have to pay €100,000 to your ex to buy him/her out.
You are not married and you own 75% of the property and your soon-to-be ex owns 25%. You buy out your partner. Your home is valued at €400,000. Your remaining mortgage debt is €200,000. The excess value is then €200,000 of which 25% belongs to your ex. You have to pay €50,000 to your ex to buy him/her out. You can buy out your ex with your own money, borrowed money or a gift from family, for example, or by increasing the mortgage. If you want to increase your mortgage, the mortgage lender will look at your financial situation and assess whether you can increase it. This is because you must take over your ex’s share of the mortgage debt, or else take out a new mortgage that is in your name only. The mortgage broker looks at your income and debts, as well as any alimony you may have to pay or receive. Everything he includes in the calculation.
Note that when you take over your ex’s share, the tax authorities require you to pay off the part of the mortgage that you take over or that you take out a new mortgage for. So if you were sitting comfortably on an old fully repayable mortgage, now part of that mortgage has become non-repayable. If you don’t pay off that part, you are no longer entitled to mortgage interest deductions.
The ex you are going to buy out also has a tax obligation. He/she must use the proceeds from the buyout in a new home stop if he/she buys a new home within 3 years. Does your ex this, then he/she is not entitled to deduct the mortgage interest. Will you ex rents for 3 years and he/she buys a new home after 3 years, then that buyout surplus value does not have to be put into the new house.
Well, are all the lights on green? Then you can start with the sale of the home. If at all possible, try to make the sale if the house is still nice and completely furnished and decorated. That sells always better, than having to sell a property where the TV is on a crate beer stands. Is there any undervaluation? Then the departing partner must share in the costs incurred by the undervalued property. Have If you have a mortgage with a National Mortgage Guarantee, then you may be eligible to have this undervaluation waived. Are you the one who moved out of the house and do you still pay for the mortgage charges? Then the tax authorities will allow you to continue for 2 years to pay the interest that you pay deductions.