A separation is one of the hardest phases in life. And often, in the midst of this already difficult time, one big question hangs in the air: what happens to the shared house? It is not only an asset but a place full of memories, frequently the largest holding both partners own, and not seldom still tied to a running loan. Precisely because so much depends on it, it is worth looking at the options calmly and objectively before decisions are made. As an estate agency on Königsallee in Düsseldorf, we have accompanied owners in special life situations for over 60 years, discreetly and neutrally. This guide explains the most important options, the legal background and the tax aspects, so that you can assess your situation and find a fair solution together.
The five options for the shared house at a glance
When spouses separate and own a house together, there are essentially five paths in practice. Which one fits depends on your personal and financial situation; not every path makes sense for every family.
- Takeover by one partner with a buyout. One partner stays in the house and pays the other out for their share. This requires that the remaining person can carry the financing alone.
- Joint sale and division of the proceeds. Both sell the house, redeem the loan and divide the remaining proceeds. This is often the cleanest solution because it gives both a clear economic fresh start.
- Joint letting. Both keep the house for now and rent it out. A transitional solution when an immediate sale is not desired.
- Partition auction (Teilungsversteigerung). If no agreement is reached, one partner can force the auction. This is the last resort and usually disadvantageous for both sides.
- Physical partition (Realteilung). The plot is actually divided into two independent parts. With a normal single-family house this is rarely possible and only comes into consideration in special constellations.
In the following sections we address the legal and tax background that matters for all of these paths.
Community of accrued gains and the equalisation of accrued gains
Most married couples in Germany live in the so-called community of accrued gains (Zugewinngemeinschaft), unless they have agreed otherwise by marriage contract. This follows from § 1363 BGB. The key point to understand: in the community of accrued gains, the spouses' assets do not automatically become joint. Each remains owner of what belongs to them. In a divorce it is not the house itself that is divided, but the accrued gain (Zugewinn), that is, the increase in assets that both achieved during the marriage.
For the house this means: it is included with its value in the asset balance of both partners. If both own it jointly, the respective share flows into each partner's assets; existing loans reduce the value. Whoever has achieved more accrued gain in the end pays the other half of the difference. So the house is not simply split down the middle, but taken into account as an asset position.
There are special cases when a house existed before the marriage or was inherited or gifted during the marriage. Such assets are treated differently in the equalisation of accrued gains. How the equalisation of accrued gains is calculated in your specific case is best clarified by your own lawyer. For us as estate agents, one thing above all is decisive: a realistic, neutral value of the house as a fair basis for any agreement.
Co-ownership and the land register: who owns the house?
With a house bought together, both partners are in practice often entered in the land register as co-owners of one half-share each. What is decisive for the ownership question is precisely this land-register entry, not who paid the loan instalments or who actually contributed more.
An important consequence of this: a separation or divorce does not automatically change the ownership situation. As long as both are in the land register, both remain owners. Whoever wishes to give up or take over the house must expressly transfer their co-ownership share. Such a transfer must be notarised; only afterwards can the land register be rewritten.
A joint sale to a third party also generally requires the participation of both owners. No one can simply sell the other's half-share alone. This is an important point for reaching agreement: as long as there is no mutual consent, the house cannot be realised by the normal route. A neutral valuation often creates the objective basis here for moving forward together.
Running financing and the land charge: joint liability
If the house is not yet paid off, the financing is one of the most delicate points. If both partners signed the loan agreement jointly, they are as a rule liable to the bank as joint and several debtors (Gesamtschuldner). That means: the bank can demand the full instalment from each one individually, regardless of who lives in the house or who has moved out.
A common misunderstanding: whoever moves out is by no means out of the loan because of that. The liability from the loan agreement remains in place until the bank expressly agrees to a release or the agreement is reorganised. In a takeover by one partner, two steps must therefore be distinguished that legally have nothing to do with each other:
- the transfer of the ownership share in the land register, and
- the release from loan liability by the bank, for example via a change of debtor or a debt rescheduling.
The land charge (Grundschuld) entered in the land register is to be separated from personal liability. It remains in place until it is deleted or newly regulated. In a sale, the loan is usually redeemed from the purchase price, and an early-repayment penalty (Vorfälligkeitsentschädigung) may arise. It is worth discussing this early with the bank, so that the financial scope for a fair solution is clear.
The partition auction as a last resort
If the partners cannot agree, there is a statutory emergency exit: the partition auction (Teilungsversteigerung). It is based on § 749 BGB, according to which any co-owner can demand the dissolution of the community at any time. Since a house cannot be cut down the middle, the dissolution takes place through sale and division of the proceeds (§ 753 BGB). The actual procedure is governed by the Compulsory Auction Act.
The unpleasant twist: a single partner can set the procedure in motion, even against the will of the other. This is why the partition auction is often threatened as a means of pressure rather than actually carried through. Anyone seriously considering it should know its disadvantages:
- Proceeds below value. Auctioned properties in practice often achieve considerably less than in a free sale. The low proceeds affect both partners.
- Long duration. From filing the application to payout, many months often pass, not seldom over a year.
- Costs. Court fees and the market-value appraisal are paid from the proceeds first.
- Conflict instead of solution. The procedure usually sharpens the dispute rather than settling it.
The bottom line: in a partition auction there are rarely winners. A well-prepared joint sale almost always brings a higher return, which both sides share, and leaves both in control of the timing and conditions.
Taxes on sale: speculation tax and owner-occupation
When selling a house, a tax on the gain may arise, colloquially called speculation tax (Spekulationssteuer). The decisive provision is § 23 EStG: if a property is sold again within ten years of purchase, the gain is in principle taxable. This also applies to the sale of a mere co-ownership share.
There is, however, an important exception: if the property was used for one's own residential purposes in the year of sale and in the two preceding years, the gain remains tax-free. So anyone who personally lives in the house continuously and sells is regularly on the safe side.
In a separation this point becomes delicate. If one partner moves out and leaves the house to the other, this no longer counts as owner-occupation for the one who moved out, according to the case law of the Federal Fiscal Court (Bundesfinanzhof). In 2023 the BFH ruled that the transfer of the co-ownership share to the ex-partner within the ten-year period can be a taxable private disposal transaction, even if it takes place under the pressure of a looming auction within the framework of the divorce settlement agreement. Nor does the fact that the joint child continues to live in the house change anything, if the former spouse also lives there at the same time. A purely gratuitous transfer, by contrast, does not trigger a new period. Because the tax consequences depend on the individual case, you should clarify these questions in good time with your tax adviser, ideally before any agreements are signed.
Process and tips for a fair, objective agreement
However different the situations are, an orderly approach almost always helps. These steps have proven their worth:
- Get clarity about the figures. What is the current market value of the house? How much loan is still outstanding? Only when both partners start from the same, neutral figures can negotiations be fair.
- Examine the options soberly. Can and does one partner want to carry the house alone? Is a joint sale the cleaner break? An honest assessment of the financing is part of this.
- Separate factual questions from emotions. That is hard in this phase. A neutral third party that only values the property objectively often takes pressure out of the conversation.
- Obtain legal and tax advice. Equalisation of accrued gains, the land register and speculation tax are complex. Your lawyer and your tax adviser are the right contacts here.
It is precisely on the factual side that we can help. As a neutral estate agency, we prepare a market-appropriate, comprehensible valuation of your house that serves both partners as a fair common basis. If a sale is desired, we accompany it discreetly and in an orderly way, without pressure and at the pace that suits your situation. Through our network grown over decades, with more than 20,000 contacts in Düsseldorf and NRW, we find the right buyer, on request also outside the public portals. The legal and tax details are clarified by your lawyer and your tax adviser; the fair valuation and the calm sales process we take on.
