Sharing house ownership with spouse

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mm_suomi
Posts: 7
Joined: Sat Dec 02, 2017 6:29 pm

Sharing house ownership with spouse

Post by mm_suomi » Wed Sep 23, 2020 12:42 pm

Hey, I have been pondering about this situation and I am wondering if someone has some experience in this regard,

Scenario: Me and my wife are both first time home buyer. I have a job, but my wife currently does not. Lets say house we are planning to purchase costs 300K euros. Our combined savings are 20% (60K euro) of the total cost: among which I have 15k and my wife has 45K euros. How the house ownership be shared among us? Will I be owning 25% of the house and my wife 75%?

Since I have the job, so banks are willing to give out loan to me but not to my wife; but will the bank loan on my name change my percentage of ownership? Will bank cover the loan only upto 25% of house price (my ownership % in home) or will they be okay to cover entire home price?

We both are quite under 40 years and we also want that one among us hold less than 50% of home ownership at this point, in order to retain an option to save property transfer tax in future.

I understand I should direct these questions to the banks, but they are not very clear at this moment. I wanted to hear perspective of someone who has bought home with a spouse. Any tips or suggestions are welcomed.

You guidance will be appreciated. Thanks!



Sharing house ownership with spouse

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betelgeuse
Posts: 3621
Joined: Thu Aug 29, 2013 1:24 am

Re: Sharing house ownership with spouse

Post by betelgeuse » Wed Sep 23, 2020 1:11 pm

mm_suomi wrote:
Wed Sep 23, 2020 12:42 pm
Scenario: Me and my wife are both first time home buyer. I have a job, but my wife currently does not. Lets say house we are planning to purchase costs 300K euros. Our combined savings are 20% (60K euro) of the total cost: among which I have 15k and my wife has 45K euros. How the house ownership be shared among us? Will I be owning 25% of the house and my wife 75%?
You can choose quite freely. However, you also need to make payments so that they match with the ownership or otherwise there are gift tax implications. For tax purposes the easiest way to have a record is to use a separate account for the mortgage payments to which both transfer money in agreed upon proportions. If it's 300k and 75% for the wife, the mortgage will be 240k of which she would need to pay 180k. Considering that she is not working, this probably isn't realistic without a gift involved.

Also remember that regardless of ownership, without a prenup at the end of marriage assets are split 50-50 any way.
mm_suomi wrote:
Wed Sep 23, 2020 12:42 pm
Since I have the job, so banks are willing to give out loan to me but not to my wife; but will the bank loan on my name change my percentage of ownership? Will bank cover the loan only upto 25% of house price (my ownership % in home) or will they be okay to cover entire home price?
Your wife would need to at least sign papers saying that she consents to the property being used as collateral for your loan. However, it's quite weird from the banks perspective that they would refuse to add an additional person to the loan since it's just added security (not that they always behave logically).

mm_suomi
Posts: 7
Joined: Sat Dec 02, 2017 6:29 pm

Re: Sharing house ownership with spouse

Post by mm_suomi » Thu Sep 24, 2020 1:17 pm

Thank you betelgeuse for the information.
Is it so that if I own less than 50% of the house share then I still pay the transfer tax (on my share of the property) even if it is my first home?

betelgeuse
Posts: 3621
Joined: Thu Aug 29, 2013 1:24 am

Re: Sharing house ownership with spouse

Post by betelgeuse » Thu Sep 24, 2020 8:25 pm

mm_suomi wrote:
Thu Sep 24, 2020 1:17 pm
Thank you betelgeuse for the information.
Is it so that if I own less than 50% of the house share then I still pay the transfer tax (on my share of the property) even if it is my first home?
You will.


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