Separating? Who gets the house?

If you’re separating or going through a divorce, you may be worried about how your property will be split.

As well as being your main asset, it’s been well loved as a family home, so emotions can run high.

And when children are involved it can be incredibly difficult to manage, especially if things are not amicable.

Often, the parent who takes on the main care of the children will stay in the family home so that they have the space and accommodation they need.

However, this leaves the other parent without a home and courts may be asked to intervene to get them compensation.

If at all possible, it’s always advised for a couple to try to work things out between them without the need for a court hearing.

How a property can be dealt with

There are different ways in which a property can be dealt with in divorce or separation:

Sale of the home

When the property is worth enough so that each party can buy a new home, an outright sale can be the perfect situation for everyone. In the divorce proceedings you can agree on the share of sale proceeds that you will each receive.

Buying out the other partner

If one party wants to own the property and buy the other out, this can also be agreeable way to go forward for both parties. The buyer could take out a new mortgage or perhaps they have a larger share of assets including investments.

Figures are agreed by solicitors or during mediation or, if neither of these options result in an agreement, by order of the court.

Legal charge back

The property can be transferred to one party with the other owner holding a legal charge over the property.

This means the person staying in the property will need to pay off this sum to the other party which can be hard to arrange as it requires consent of the mortgage lender.

Defer sale of the property

Another option is to defer the sale of the property until children have grown up.

The property remains in joint names and it’s up to the couple to agree who will pay outgoings such as the mortgage and maintenance costs.

It can also cause problems for the party who moves out, because if they were to purchase a property to live in themselves it would be classed as a second home which would mean they would need to pay a Stamp Duty surcharge as well as Capital Gains Tax on the sale.

Unmarried couples

Where a couple is not married and only one party ‘owns’ the marital home or is named on the tenancy, the other may still have a right to stay there in the short term and/or may also have a right to claim against equity in the property because they have acquired an interest in it.