Divorce almost always raises one central question: what happens to the couple's home? Between an amicable sale, temporary joint ownership, or one spouse buying out the other's share, several solutions are available depending on the financial situation and the circumstances of the separation. This article reviews the possible options, the role of the notary, and the tax rules applicable to a property sale divorce, without replacing personalized legal advice.
In Summary
- Three main options exist for jointly owned property: an amicable sale before the divorce, temporary joint ownership, or one spouse buying out the other's share (cash equalization payment).
- The matrimonial property regime (community property or separation of property) determines how the sale proceeds are divided between the former spouses.
- During the proceedings, the sale of the family home requires the agreement of both spouses, except in exceptional cases where authorization is granted by the family court judge.
- The principal residence benefits from a capital gains tax exemption, and the notary plays a central role in the liquidation of the matrimonial property regime and the distribution of the sale proceeds.
What Are the Options for the Joint Home During a Divorce?
When a married couple separates, the fate of the jointly owned home is one of the most sensitive issues to resolve, alongside child custody and the division of assets. Three main options are generally available to the spouses, each with different financial and practical consequences.
An Amicable Sale Before the Divorce
Selling the property by mutual agreement, even before the divorce is finalized, is often the simplest solution. It makes it possible to quickly bring a shared financial chapter to an end and divide the sale proceeds according to the rules of the matrimonial property regime, without waiting for the end of the court proceedings. However, this option requires both spouses to agree on the principle of the sale, the price, and the choice of professional responsible for marketing the property.
Remaining in Joint Ownership After the Divorce
If no agreement is reached before the divorce is finalized, the former spouses may remain joint owners of the property, with each holding a share generally proportional to their contribution or determined by their matrimonial property regime. This situation, which is intended to be temporary, may nevertheless continue if relations remain strained, often generating friction over maintenance, expenses, or occupation of the property.
One Spouse Buying Out the Other's Share
One of the former spouses may also buy out the other's share in order to become the sole owner of the property, in exchange for a cash equalization payment. This solution makes it possible to keep the family home, particularly when children attend school there, but it generally requires the existing mortgage to be renegotiated or taken over solely by that spouse. For those who prefer to start a new project rather than buy out the other's share, consulting our property listings can help visualize the options available on the market.
The Impact of the Matrimonial Property Regime on the Division of the Property
The matrimonial property regime chosen at the time of marriage directly determines how the property will be divided in the event of divorce.
The Community Property Regime
Under the statutory community property regime, known as the community of property reduced to acquisitions, which applies by default in the absence of a marriage contract, property purchased during the marriage generally belongs to both spouses in equal shares, regardless of each spouse's initial financial contribution. The sale proceeds are therefore divided equally between the former spouses, except where specific clauses or sources of financing (personal funds, gifts, inheritance) may alter this distribution and require a case-by-case analysis.
The Separation of Property Regime
Under a separation of property regime, each spouse generally remains the owner of the assets they financed. If the home was acquired in joint ownership by both spouses, the division is based on the ownership shares stated in the purchase deed, which do not always correspond to a 50/50 split. In all cases, only a notary or lawyer can accurately establish each person's rights based on the documents and the marriage contract.
How Does an Amicable Sale Work During Divorce Proceedings?
The sale of the family home is not insignificant from a legal standpoint, even while proceedings are ongoing, because this property benefits from special protection provided for by the French Civil Code.
The Agreement of Both Spouses: The General Rule
During the marriage and until the divorce is finalized, the family home may only be sold with the consent of both spouses, even if one of them is its sole owner. This rule protects the family against a hasty unilateral sale. When both spouses agree, the sale can be organized smoothly, and the proceeds obtained then form part of the assets to be divided according to the rules applicable to the matrimonial property regime.
Recourse to the Family Court Judge in the Event of Disagreement
If one spouse refuses the sale without legitimate grounds, or is unable to give their consent, the other may apply to the family court judge for authorization to sell alone. The judge will assess whether or not the refusal is justified by the interests of the family. Once the divorce has been finalized, if the property remains in joint ownership, either former spouse may also request a court-ordered sale, as no one can be required to remain in joint ownership indefinitely.
The Role of the Notary in the Division of the Property
The notary is involved at several key stages of the process. They carry out the liquidation of the matrimonial property regime, meaning the inventory and valuation of all jointly owned or indivisible assets, and then draw up the liquidation statement determining the share due to each spouse. During the sale, the notary also receives the proceeds and is responsible for distributing them between the former spouses according to their respective rights, after repayment of any outstanding mortgage balance and payment of transaction-related costs. Their involvement is mandatory whenever real estate is involved in the divorce, whether for an amicable division or as part of more contentious proceedings.
What Happens to the Existing Mortgage?
The existence of an outstanding mortgage often complicates the separation, because the bank remains a third party outside the divorce proceedings and continues to apply the terms of the original contract.
Who Continues to Repay the Mortgage During the Proceedings?
As long as the divorce has not been finalized and the mortgage has not been modified, both borrowers remain jointly and severally liable for repayment to the bank, regardless of who actually occupies the property. It is therefore recommended to clarify as quickly as possible, if possible amicably or with the assistance of a lawyer, how the monthly payments will be covered until the situation stabilizes.
Release of One Borrower from the Mortgage
When one spouse wishes to keep the property, they generally need to request the release of the other borrower from the mortgage from the bank: the bank then reassesses the creditworthiness of the borrower who will remain solely responsible for the loan and may refuse the arrangement if it considers the guarantees insufficient. If the request is approved, an amendment is signed and formalized before the notary, often at the same time as the buyout of the other's share. If the release of one borrower is refused or if neither spouse wishes or is able to keep the property, the sale remains the simplest solution for settling the mortgage and bringing the situation to an end.
What Tax Rules Apply to a Sale in the Event of Divorce?
From a tax perspective, the sale of a principal residence benefits from a full exemption from real estate capital gains tax, with no minimum holding period, provided that the property is occupied on the date of the sale. This exemption may remain applicable even if one of the former spouses has already left the property, provided that the other spouse continues to occupy it until it is actually put up for sale. The tax authorities generally allow a period of around twelve months between the property being put up for sale and the signing of the authentic deed, although this period may be assessed more flexibly if particular circumstances (a difficult local market, a consistent price, active marketing efforts) are demonstrated. Outside this principal-residence situation, the sale of a second home or rental property remains subject to the standard real estate capital gains tax regime, with progressive allowances based on the length of ownership; a notary can confirm the exact situation applicable to each case.
Timeline and Practical Steps of the Sale
In practical terms, a property sale linked to a divorce generally follows these steps: agreement in principle between the spouses (or authorization from the judge), property valuation, putting the property up for sale and finding a buyer, signing a preliminary sales agreement, and then signing the authentic deed before the notary, who proceeds with the distribution of the sale proceeds. Depending on how smoothly the spouses communicate and on the state of the local market, this process may take from a few weeks to several months, with the longest phase often being the search for an initial agreement rather than the transaction itself once the property has been put up for sale.
Our Advice for Approaching This Stage with Peace of Mind
A separation is frequently accompanied by an emotional burden that can complicate financial decisions. To limit tensions, it is essential to rely on a [free property valuation](https://www.capifrance.fr/fr/estimation) that is objective and carried out by a neutral professional rather than by either spouse, in order to avoid any suspicion of undervaluation or overvaluation. Calling on a [local Capifrance property advisor](https://www.capifrance.fr/fr/conseillers) also makes it possible to have a single and impartial point of contact, capable of coordinating the marketing of the property while taking into account the constraints specific to a sale in the context of divorce. Finally, it remains essential to obtain assistance from a notary and, if necessary, a lawyer, in order to legally secure each stage of the division.
Conclusion
The division of real estate property during a divorce is based on a balance between the legal rules of the matrimonial property regime, the financial constraints associated with the outstanding mortgage, and the former spouses' ability to communicate calmly. Whether it involves an amicable sale, remaining in joint ownership, or a buyout of the other's share, each option has different implications that should be assessed with the assistance of qualified professionals. Surrounding oneself with a notary, a lawyer if necessary, and a real estate professional makes it possible to approach this stage with greater clarity and limit potential sources of conflict.
FAQ
Can the House Be Sold Before the Divorce Is Finalized?
Yes, if both spouses agree, it is entirely possible to sell the home before the divorce is finalized. The sale proceeds will then form part of the assets to be divided according to the rules of the matrimonial property regime. In the event of disagreement, authorization from the family court judge may be necessary.
What Happens If One Spouse Refuses to Sell?
During the proceedings, the family home is protected and its sale generally requires the agreement of both spouses. In the event of an unjustified refusal, the spouse wishing to sell may apply to the family court judge; after the divorce has been finalized, if the property is jointly owned, a court-ordered sale may also be requested.
Who Pays the Mortgage Payments During the Proceedings?
As long as the mortgage has not been modified, both borrowers remain jointly and severally liable to the bank, regardless of who actually occupies the property. It is advisable to clarify this issue quickly, ideally amicably, in order to avoid missed payments.
Is the Sale of the Principal Residence Taxed in the Event of Divorce?
No, the principal residence benefits from a full capital gains tax exemption, with no minimum holding period, as long as it is occupied on the date of the sale. This exemption may remain applicable even if one of the former spouses has already moved out, provided that the other continues to occupy the property until it is put up for sale.
How Are the Sale Proceeds Divided Between the Former Spouses?
The distribution depends on the matrimonial property regime and, where applicable, on the ownership shares stated in the purchase deed. During the liquidation of the matrimonial property regime, the notary determines the share due to each person after repayment of the mortgage and costs associated with the sale.
Is It Mandatory to Use a Notary to Sell Jointly Owned Property?
Yes, the involvement of a notary is mandatory for any real estate sale, and it is particularly important in the event of divorce because the notary handles the liquidation of the matrimonial property regime and the secure distribution of the sale proceeds between the former spouses. The notary can also assist with a potential buyout of the other's share or the release of one borrower from the mortgage.
Author
Frédéric Rémy – Director of Sales Performance
A real estate professional with several years of experience within the Capifrance network, I would like to share essential advice with you to help you successfully complete your property project with our advisors.
