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Selling a house after divorce

Have you split from your ex and want to find out about the process of selling a house after divorce? We take a look at your options and what to beware of.



After you’ve come to an agreement with your ex on splitting your assets, here’s how selling a house after divorce works.


Selling a house after divorce

You have 3 main options in terms of selling a house after divorce:

  1. You both sell up and move out: This means selling the house and the proceeds of the sale will be divided as per the agreement you have reached.

  2. Choosing to sell the house later: This means keeping the family home; this typically happens when children are involved so that they can stay in the family home until the children reach a certain age. One partner usually moves out but they don’t sacrifice rights to ownership. In this scenario, the person moving out is still liable for the debt on the family home. This means that they may struggle to get a mortgage on another property.

  3. Buying your partner out: This involves applying for a “transfer of equity”. Read on for more on this.


Getting your property valued

When you’re selling a house after divorce you’ll need to start by getting the property valued. A valuation survey is recommended as it’s an independent, professionally-prepared assessment of a property’s value, based on a set of standards set out by RICS.

An independent professional survey is recommended over an estate agent’s estimate as the former is based on stricter, accepted standards set out by RICS. This is more likely to be accepted by the courts and mortgage lenders for example.


How does the process of selling a house after a divorce work?

The process of selling a house after a divorce works largely in the same way as if you sell any property. The property will be valued, you’ll both need to choose the best estate agent to handle the sale.


During a divorce, you’ll likely want to keep the administrative costs down. So don’t forget to negotiate on estate agent fees (you should look to pay about 1% commission).

Once you have an offer, you’ll need to instruct a conveyancer between you who will handle the legal side of your sale. You can get quotes from regulated conveyancers today


Transfer of equity and mortgages explained


If you’re buying your ex partner out and you want to remove them from a joint mortgage, you can apply for a “transfer of equity”. This involves one partner legally transferring the ownership to another.

You’ll need to get a solicitor to handle the transfer of equity process. If you don’t already have one, you can use our free tool to find a lawyer to undertake your transfer of equity.


Transfer of equity costs


If you don’t have the money to buy your ex out you can apply to take out a bigger loan by remortgaging. But you’ll need to prove to your lender that you can afford the repayments. It’s worth speaking to a fee-free mortgage broker. They may be able to find you a better deal and they can also match you with a lender that’s most likely to accept your application. And if you’re getting divorced they’ll answer any mortgage questions you have too.  


Selling your house after a divorce and tax


Inheritance tax & Capital gains tax: Transfers between spouses are exempt from inheritance tax (IHT) and capital gains tax (CGT), and this continues throughout the period of separation up until the decree absolute. But when it comes to tax, it’s always a good idea to speak to an expert.


Stamp duty: If you’re applying for a transfer of equity and you’re married or in a civil partnership, you won’t normally have to pay stamp duty land tax on the portion you are buying from your partner. 


Is selling property before a divorce settlement in the UK a good idea?


This will depend on your circumstances. It’s a good idea to speak to a divorce lawyer about this so you can weigh up your options and decide the best approach for you. There may also be financial and tax considerations, so do get proper independent financial advice at this time.


Article by Rebecca Gamble in Home Owners Alliance Online

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