What Happens When You Sell A Home During Divorce?
During a divorce, all your marital assets, including your family home, will need to be appropriately split up between you and your soon-to-be ex. So what happens if you decide to sell your home during the divorce?
If you decide to sell
During the divorce process, the property is divided equitably, but more than anything else, it is usually the family home that becomes a central focus for both sides. Sometimes, both partners may want to relocate and ‘get away’ from the home, and are happy to sell. If there is a mortgage involved, then this is a way to do away with any shared debt obligations.
Just remember, all the money you get from the sale of your property isn’t yours to keep. Before it can be divided between you and your spouse, the broker fee will need to be paid, the mortgage cleared, any second mortgages if applicable as well, and lastly the capital gains tax if it applies.
If you are solely responsible for making mortgage payments after your separation, then the amount contributed during this period by you towards the joint equity, should also be considered. Equally, your partner could make a similar claim if they made the payments.
If you (or your spouse) decide to keep the home
In case both spouses agree that one of them, usually the parent with primary responsibility for the children, gets to keep the family home, the attorneys and the judge will factor this in when dividing the rest of the assets or working out spousal support or child support.
Even in this case, though no sale of property is involved, the property will be valued at a certain amount. If you and your spouse are unable to fix on a value, the court might itself appoint a real estate agent or a surveyor to assess the home. Once the market valuation is ascertained, it can be modified if there are major changes – both upward or downward – in prices in the market.
Community property vs. separate property
If the property was acquired during the course of your marriage or was registered in both your names, sale proceeds will be equitably divided. Even if the property is registered in just one person’s name, as a result of marital obligations, the other spouse will still have a right to their fair share of the proceeds. Property owned by one of the spouse’s before they got married, or received by way of inheritance, qualifies as separate property and will not be divided.
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