Buying a house during divorce: who owns it and what are the risks?

Yes, you can buy a new home during your divorce, but who owns it depends on your matrimonial property regime and on the timing. If you are married in community of property and buy before the divorce petition is filed, the home in principle falls into the community and your spouse shares in it; if you buy after the petition has been filed, it is in principle yours alone.

Below we explain how your matrimonial property regime works, why the filing date is decisive, whether you need your spouse’s consent, how lenders look at your situation, and what the effects are on maintenance and tax.

How does your matrimonial property regime affect a new home?

Your matrimonial property regime determines who becomes the owner of a home you buy during the divorce proceedings. Without knowing your regime, you cannot assess the consequences of a purchase.

In a community of property (gemeenschap van goederen), assets and debts are shared. With a prenuptial agreement (huwelijkse voorwaarden) this can be arranged completely differently, and the exact wording of your agreement is decisive.

Community of property

If you married before 1 January 2018 without a prenuptial agreement, you are in principle married in general community of property: almost everything either spouse owns falls into it. If you married on or after that date without a prenuptial agreement, a limited community applies, which in principle includes what you acquire during the marriage. In both cases a home you buy during the marriage in principle falls into the community, together with the mortgage debt, and your spouse shares in it even if only your name is on the deed.

Separation of property

A prenuptial agreement with full separation of property gives you much more freedom. If no community exists, you can buy a home on your own without your spouse becoming a co-owner.

• The new home is your private property.
• Your spouse does not share in any increase or decrease in value.
• The division in the divorce becomes simpler.

Note: many people believe they have full separation of property, while their prenuptial agreement contains a limited community or a settlement clause (verrekenbeding). Under a periodic or final settlement clause, the value of a home bought during the marriage may still have to be shared. Always check the exact wording of your agreement.

Why is the date of the divorce petition decisive?

For a marriage in community of property, the moment the divorce petition is filed with the court determines what belongs to the community. What you acquire after that date no longer falls into it.

Under Article 1:99 of the Dutch Civil Code (BW), in the case of divorce the community is dissolved at the moment the divorce petition is filed. This rule has applied since 2012. Towards third parties who were not aware of it, the dissolution only takes effect if the petition has been registered in the matrimonial property register (huwelijksgoederenregister).

Before the petition is filed

As long as the divorce petition has not been filed, you remain fully bound to your spouse under matrimonial property law. Buying a home at this stage has far-reaching consequences.

• The new home in principle becomes part of the community.
• Your spouse shares in it, whoever signs the deed.
• The mortgage loan is in principle a community debt, for which the community is liable.
• In the division it must be decided who takes over the home, or whether it is sold.

The risks of buying at this stage:

• You create an extra asset that must be divided.
• Your spouse can claim half of any increase in value.
• Creditors of your spouse can in principle also take recourse against assets of the community, including this home.

After the petition is filed

From the moment the divorce petition is filed with the court, the community is dissolved and new acquisitions no longer fall into it. That changes the position fundamentally.

• A new home you buy now in principle belongs to your own property.
• Your spouse does not share in it.
• A new mortgage debt you take on is in principle your own debt.
• The home does not have to be included in the division of the community.

Are there exceptions before the filing date?

Yes. A home can stay outside the community even when you buy it during the marriage, if you pay for more than half of it from your own, private assets.

Under Article 1:95(1) BW, an asset a spouse acquires for consideration stays outside the community if more than half of the price is paid at the expense of that spouse’s own property. Examples are money you inherited or received as a gift with an exclusion clause (uitsluitingsclausule), or money that already fell outside the community under your prenuptial agreement.

• More than half of the purchase price must come from your own property.
• The origin of the money must be demonstrable, for example with bank statements and the will or deed of gift.
• It is wise to have the origin of the funds recorded when the home is transferred, for example in the notarial deed, so that there is no discussion about it later.

If you also need a large mortgage, it is often difficult to meet the “more than half” test. Get advice before you sign.

Do you need your spouse’s consent?

For buying a new home that you do not live in together, you do not need your spouse’s statutory consent. Lenders may nevertheless ask for your spouse’s cooperation as long as you are still married.

Article 1:88 BW requires the consent of the other spouse for a limited number of acts: among others, selling, encumbering or letting the home the spouses live in together or that the other spouse lives in, gifts beyond the customary, and acting as guarantor. A mortgage on a new home that is not the marital home does not fall under that article.

In practice, however, a mortgage lender may still ask for your spouse’s signature, or for proof that the divorce petition has been filed and registered, as long as the divorce has not been registered with the civil registry. That is a condition of the lender, not a statutory requirement. If your spouse refuses to cooperate, discuss with the lender which evidence it will accept instead, or make an arrangement about it in the divorce agreement.

How do you get a mortgage during a divorce?

It is possible, but lenders are cautious and want certainty about your financial position after the divorce. Clear agreements about the marital home and maintenance are usually a condition for a binding offer.

Steps for a mortgage application:

• Map your financial position: income, debts, housing costs and any maintenance you will pay or receive.
• Draw up a (draft) divorce agreement (echtscheidingsconvenant) with arrangements about the marital home, the division of any surplus value or residual debt, and maintenance.
• Get clarity about the marital home: the lender wants to know whether it will be sold or taken over by one of you, and whether you will be released from the existing mortgage.
• Talk to a mortgage adviser early and have your borrowing capacity calculated with and without maintenance.

Without clear arrangements about the marital home and maintenance, a lender will often not issue a binding offer, because it wants to take all future costs into account. Some lenders issue a conditional offer that becomes final once the divorce agreement has been signed.

What are the consequences per scenario?

The overview below shows the main differences for a marriage in community of property.

The best starting position is usually to buy after the petition has been filed, with a signed divorce agreement that settles the marital home, maintenance and the division. That gives the lender certainty and prevents your spouse from unexpectedly sharing in the new home.

What are the tax consequences?

The timing of your purchase also matters for tax. Under the Dutch additional borrowing rule (bijleenregeling), if you sold a previous home with surplus value, you can only deduct mortgage interest on the purchase price of the new home minus that surplus value (the eigenwoningreserve).

Example from the Dutch tax authorities: if your old home had 40,000 euros of surplus value and you buy a new home for 200,000 euros, you can deduct interest on a loan of at most 160,000 euros. In a divorce, the surplus value of the marital home is often divided, which makes the calculation complex. Have a tax adviser calculate it before you commit.

Which problems arise most often, and how do you solve them?

Most problems concern the marital home, the lender’s conditions and maintenance.

Your spouse will not cooperate

Sometimes a spouse refuses to cooperate with the sale of the marital home, a release from the existing mortgage or a statement the new lender asks for, out of unwillingness or to gain leverage.

Solution: record the arrangements about the marital home and the purchase of new homes in the divorce agreement as early as possible. If your spouse refuses to cooperate in the division or sale of the marital home, the court can decide on the division in the divorce proceedings. That takes time and involves costs, so start early.

The lender sets extra conditions

Lenders are strict. Without a final divorce agreement, or with uncertainty about the marital home, financing can stall.

• State explicitly in the divorce agreement that both of you may buy another home.
• Consider renting temporarily if the proceedings take a long time.
• Ask the lender which additional security it accepts, such as more own funds or a lower loan.

Effect on maintenance and housing costs

A new mortgage affects your capacity to pay or your need for maintenance. The maintenance guidelines used by the Dutch courts (Rapport alimentatienormen) work with a fixed housing budget of 30% of net disposable income; higher housing costs are only taken into account if they are unavoidable and not your own choice.

Choosing an expensive new home generally does not reduce the maintenance you have to pay, but it does reduce your own financial room. Weigh this carefully.

What should you check as the spouse who wants to buy?

Under Article 1:99 BW the filing date of the divorce petition decides whether a new home in community of property is yours alone. Check these points before you sign a purchase agreement:

• Check your matrimonial property regime; if you have a prenuptial agreement, request a copy from the civil-law notary and look for a settlement clause.
• Check with your lawyer whether, and on which date, the divorce petition has been filed.
• If you pay with inherited or gifted money, keep the bank statements and the will or deed of gift, and have the origin recorded in the notarial deed (Article 1:95(1) BW).
• Have a mortgage adviser calculate your borrowing capacity with and without maintenance.
• Have the additional borrowing rule (bijleenregeling) checked by a tax adviser.

What should you check as the other spouse?

A home your spouse buys before the filing date may fall into the community, together with the mortgage debt. Check these points:

• Check whether the purchase took place before or after the filing date of the divorce petition.
• Ask for the purchase agreement, the notarial deed and the mortgage offer.
• Check whether your spouse can prove that more than half was paid from private funds.
• Check whether the new housing costs are used to argue for lower maintenance; the court only accepts unavoidable housing costs.
• Before signing any statement for your spouse’s lender, have the consequences for your own liability checked.

What can we do for you with buying a home during divorce?

Our divorce lawyers help you settle the property side before you or your spouse buy:

• We read your prenuptial agreement and tell you whether a new home falls into a community or a settlement.
• We file the divorce petition, so that the date that dissolves the community is fixed.
• We draft the divorce agreement (echtscheidingsconvenant) with the arrangements about the marital home, maintenance and new purchases that lenders ask for.
• We calculate the effect of the new housing costs on maintenance.
• We ask the court to decide on the division if your spouse refuses to cooperate.

Summary

• You can buy a new home during your divorce; whether your spouse shares in it depends on your matrimonial property regime and the timing.
• In community of property, the community is dissolved when the divorce petition is filed (Article 1:99 BW); a home bought after that date is in principle yours alone.
• A home paid for more than half from your own property stays outside the community (Article 1:95(1) BW).
• Statutory spousal consent (Article 1:88 BW) is not needed for a new home you do not live in together, but lenders may ask for your spouse’s cooperation.
• Check the effect on maintenance and the additional borrowing rule before you commit.

Frequently asked questions