The divorcing couples we work with have many worries on their minds, but one of the primary concerns is what will happen to the family home.
Who gets the house? Can one of you be forced to leave? Will you have to sell up?
There’s no one-size-fits-all answer, as property division during a divorce depends on several factors.
Each family requires a different solution, tailored to their unique needs and circumstances.
However, having helped many families manage their property post-divorce, we’ve noticed some common challenges that crop up again and again.
Both spouses are automatically entitled to a share of the property upon divorce, regardless of whose name is on the deeds.
This can come as a surprise to our clients who believe that sole ownership of the property means their spouse is not entitled to anything.
In England and Wales, the division of property during divorce is guided by a principle of fairness, but that doesn’t always mean a 50/50 split.
This also can come as a surprise to our clients, many of whom assume that they are each entitled to half of the property.
The courts will consider several factors when deciding who gets what, and the primary focus will be on meeting the needs of both parties and any children involved.
Factors that influence the decision include:
A common scenario we see is that one spouse keeps the family home by buying out the other’s share, either by remortgaging the property to release the necessary funds or offsetting it against other assets, such as pensions or savings.
However, if a mortgage is involved, the lender will need to agree to any changes in ownership, and they’ll want to ensure that the spouse keeping the property can afford the mortgage on their own.
If you’re keeping the house but don’t have the funds to buy out your spouse, you may need to release equity by remortgaging.
Equity release can be useful, but it’s not for everyone, and we strongly recommend seeking legal counsel before pursuing this option.
Under English law, transferring property as part of a divorce settlement can be exempt from Stamp Duty Land Tax (SDLT), but only if the transfer occurs as part of a legally binding court order or financial settlement.
While SDLT may not apply, it’s important to be aware of other potential tax implications, such as Capital Gains Tax (CGT).
In our experience, selling the property and splitting the proceeds (not necessarily evenly) can be a particularly suitable option for couples who don’t have any children, because it provides a clean break and allows each spouse to start afresh.
However, we always advise our clients to consider fully the costs of selling (such as estate agents, legal fees, and potential tax implications) before they go down this route.
Some of our clients agree to postpone selling their home, allowing one spouse (often the primary carer of the children) to live there for a set period until the children reach a certain age or finish school, at which point the house is sold and the proceeds divided.
We’ve seen that this can be a useful option for providing stability to the family while still planning for a future division of assets.
Under Home Rights, both parties (regardless of whose name is on the title deeds) are entitled to remain in the home during the divorce process until they agree different arrangements, or a Court order allows for the sale or transfer of the property.
The purpose of this automatic right is to prevent one spouse from being evicted from the family home – particularly if the owning spouse puts the home up for sale without the other’s knowledge or consent.
Unfortunately, not everyone is aware of this, and we’ve worked with many clients who feel pressured to leave the family home because they don’t realise they have a right to stay there.
That’s why, if you don’t own your home, you should register your Home Rights with the Land Registry using a Home Rights Notice as soon as possible.
This results in a notice being entered into the title register for the property, making it clear to any potential buyer that a non-owning spouse with Home Rights will be living in the house, even if the buyer follows through with the purchase.
Although the Home Rights Notice itself does not prevent the property-owning spouse from either selling or re-mortgaging the property, it is unlikely that any potential purchaser or mortgage provider would wish to go through with the transaction.
Remember, you should never use a Notice for financial gain or to intentionally frustrate the sale process to annoy your spouse – doing so could result in the court lawfully removing the Notice.
Divorce is never easy, but deciding what should happen to the family home brings its own set of particular challenges.
If you are facing divorce or dissolution where property is involved, it is essential to seek professional legal advice from an experienced lawyer who truly understands the challenges you may face.
At Hethertons, we’ve supported many couples to manage their property affairs post-divorce.
Whether you’re negotiating who will keep the house, need help with remortgaging, or are looking to sell and split the proceeds, we’ll work with you to ensure the process is as smooth and stress-free as possible.
Need help managing your property post-divorce? Get in touch with our friendly Family Law team today.
