Marital agreement when buying a home: if one brings more equity

Do we need a marital agreement to buy a home?

You need a marital agreement for a home purchase only if your contributions are clearly unequal. If you both put in similar amounts and pay off the loan together, the statutory Zugewinnausgleich (equalization of accrued gains) leads to a balanced result on divorce. It is a different matter if most of the equity comes from one side, for instance from an inheritance, a gift from parents or savings from before the marriage. Then an agreement is worthwhile.

What happens to the equity on divorce

On divorce, part of the equity you brought in ends up with your spouse. A simplified example, with no loan, no change in value and no inflation:

• You bring €200,000 from before the marriage; your spouse brings nothing. Your initial assets are €200,000, and your spouse’s are zero.
• You buy a house together and are both entered in the land register with half each. The equity comes from you alone.
• On divorce, each of you owns half of the house, and each half is worth €100,000. Your gain is zero, because you brought in €200,000 and have €100,000 left. Your spouse has a gain of €100,000.
• The equalization is half the difference § 1378 (1) BGB, so your spouse pays you €50,000.

In the end, you have €150,000 and your spouse has €50,000. Of your €200,000, €50,000 has stayed with the other side. If the money comes from an inheritance during the marriage, it does count as privileged initial assets § 1374 (2) BGB, but the result is the same.

The reason: the half of the house you financed for your spouse counts as a transfer between spouses and is part of your spouse’s gain. Courts allow a claim for repayment outside the equalization only in exceptional cases.

What the land register changes

The land register determines who owns the house, while the Zugewinnausgleich (equalization of accrued gains) determines who owes whom money. Registering shares in line with contributions, say 75 to 25, can reduce the shift to the other side or even eliminate it. However, it fixes the shares on the day of purchase. It does not reflect later contributions, such as unequal loan payments or a renovation paid for from an inheritance. How the value of the property enters the calculation is explained in Property in the equalization: the value, not the land register.

What a marital agreement can settle

Through a modifizierte Zugewinngemeinschaft (modified community of accrued gains), a marital agreement can deal with the house alone and leave the equalization in place for everything else. There are three ways to do this:

• Repayment first. On divorce, the amount contributed goes back first to the spouse who put it in. Only what remains after that enters the equalization calculation.
• Excluding the property. The house is left out of the equalization, and the agreement itself determines how any sale proceeds are divided according to contributions.
• Sharing in any increase in value. The agreement sets out whether an increase in the value of the house is split equally or in proportion to contributions.

The agreement can also settle who may take over the house on separation and at what value. What happens to the house and the loan without such a provision is explained in Property on separation. The two basic forms of the property regime are compared in Excluding or changing accrued gains in a marital agreement.

If the money comes from your parents

If your parents give you both money for the house, they can in some cases reclaim it from their son- or daughter-in-law after a divorce. The reason is that the marriage was the basis of the gift BGH, judgment of February 3, 2010, XII ZR 189/06. So a second dispute arises alongside the equalization. A gift to you alone, with a short written note from your parents, is clearer. Whether you then still need a marital agreement depends on how you later put the money into the joint house.

If the house belongs to only one of you

If only one of you is in the land register and the other helps pay the installments, the statutory Zugewinnausgleich (equalization of accrued gains) protects the spouse who pays. Each installment that pays down the loan increases the owner’s final assets, and the other spouse is entitled to half of that.

With Gütertrennung (separation of property), there is no such protection. If you help pay the installments on your spouse’s house under that regime, you have a claim to that money on divorce only in exceptional cases. A marital agreement that chooses this regime should therefore address this situation expressly.

When to sign the agreement and what it costs

The best time to sign the marital agreement is before the purchase contract. The same notary can record both deeds one after the other, since you both have to be present for the purchase anyway. If you have already bought the house, the agreement can still be concluded afterward; see Marital agreement after the wedding: what is still possible.

If the marital agreement covers only the house, the notary fee is based on the value of the house, without deducting the loan. The cap is the value that would apply to your assets as a whole § 100 (2) GNotKG. Details are in What does a marital agreement cost? The first consultation with us costs up to €190 plus VAT, at most €226.10 in total. If we take on your case, this fee does not apply. How further fees are calculated is set out under Costs.

At our office, attorney Dietrich Karcher handles real estate and the property regime. Our page on the marital agreement describes the overall framework.