Buying a House as a Couple: 2 Things You Should Know

Summary

 1. Buying real estate as a couple: married under the community regime

 2. Buying real estate as a couple: married under a separation of property regime

The conditions for buying a property depend not only on the type of property chosen (new or old) but also on your buyer profile:

 – If you are single, the conditions of purchase are “classic,” and there are no complications of formalities.

 – On the other hand, two situations deserve some light:

 ◦ You are a married couple. Several matrimonial regimes exist. The choice of marital regime impacts the acquisition made by the couple. This is what we will discuss in more detail.

 ◦ You are an unmarried couple.

1. Real estate purchase as a couple: married under the regime of the community

Two types of the regime are concerned:

 – on the one hand, the legal regime (community reduced to acquests), which is that of all married couples who have not gone before the notary before their marriage;

 – on the other hand, the specific regime according to the marriage contract for which the couple has opted; is generally the universal community.

This implies that:

 – all property acquired during the marriage is common, whether acquired by one of the spouses or in common;

 – in case of death or divorce, the property acquired in common is evaluated and divided in two.

Nevertheless, one of the spouses can buy a property or part of it with his or her own funds, i.e. from donations, legacies, inheritance or the sale price of an own property. In this case, it is advisable to be careful and to mention it in the deed of sale by being assisted by a notary:

 – to ensure that the property or the part of the property acquired with own funds does not fall into the community, a declaration of reinvestment must be made before a notary;

 – mention in the deed of purchase the part-financed by own funds and the part in common to avoid complications (inheritance, divorce).

For example, a property costing $300,000 is financed for $100,000 by one of the spouses’ own funds and $200,000 by a loan; only $200,000 of the property is included in the community. 

Note: when spouses purchase real estate with a declaration of employment, if the equity of one spouse is greater than the amount invested by the community, the real estate is considered the equity of the spouse with the greater equity.

Good to know: it is possible for a couple who has not established a marriage contract, but who wishes to avoid the risks of the legal regime to anticipate the impact on their real estate purchase in the event of separation or divorce; the solution consists of providing a clause aimed at favouring the purchase of the balance. 

2. Buying real estate as a couple: married under a separation of property regime

The system of separation of property implies that all real estate acquired separately by the spouses remains their own property. It is mainly adapted in two cases:

 – when there is an asset disparity between the members of the couple, the one who owns a property before the marriage continues to have possession of it;

 – when one of the members of the couple exercises a profession (liberal), it does not put the spouse’s assets at risk.

For a joint real estate purchase, a couple married under a regime of separation of property is subject to the rules of common ownership: the property belongs to both but in proportion to their respective financial contributions. In this case, the financial contribution of each spouse must be precisely mentioned in the deed of purchase signed before a notary; otherwise, each spouse will be presumed to hold 50% of the property.

Good to know: the creation of a Real Estate Investment Group (REIG) avoids the constraints of undivided ownership; moreover, if the spouses wish to acquire their main residence together, they can do so by introducing in their marriage contract a clause of partnership of acquests; 

In the event of divorce, the other’s property belonging to each spouse is recovered.

Good to know: a judge can decide to apply a different distribution than the one provided for in the deed of sale.

In the event of death, the deceased’s own property and half of the common property are subject to inheritance tax. To avoid these inconveniences, the spouses can plan to include in their marriage contract the last living gift.