Splitting home equity (or remaining debt) after a separation

The sale price on the sign says little about what you both keep. What matters is the net proceeds. You calculate it like this:

Sale price or estimated market value − outstanding mortgage loan − sale costs = net proceeds.

Sale costs include, for example, the appraisal report, the estate agent's fee if you use one, and any early repayment penalty if you repay the loan early. Ask your bank for that penalty, because it varies from file to file. Only when you know the net proceeds do you know whether there is equity (the loan is smaller than the value) or a remaining debt (the loan is larger than what the house yields).

Important: if you buy each other out instead of selling to a third party, there is an extra cost in Belgium. More on that below.

If you are co-owners of the home, each for half, then 50/50 is the legal starting point. Each has the right to half of the net proceeds. For married couples, the exact picture depends on your matrimonial property regime: those married under the legal regime (community of goods) usually share common assets equally, while in a separation of goods, each person's own assets remain separate and the division follows the ownership proportions in the purchase deed.

For legal or de facto cohabitants, there is no automatic matrimonial property regime. Then you look at what is stated in the purchase deed: if one bought 60% and the other 40%, the proceeds are divided in that proportion. If you are unsure about your exact division key, have the deed reviewed by your notary.

The half-half rule is adjusted by what each of you contributed extra. The most important corrections:

• Own contribution or pre-marital money: whoever used their own savings to buy the home can usually get that amount back first before the rest is divided. For married couples, this goes through a compensation account between the own and the common assets.
• Gift or inheritance: money that one of you received through a gift or inheritance and invested in the home is in principle own assets and is often compensated separately.
• Increase in value: if the home has increased in value since the purchase, that increase is usually counted proportionally in the compensation, not just the original amount.
• Payments after the breakup: if one of you continued to pay the loan alone after the separation, compensation can be requested for that.

These corrections require proof: bank statements, the deed of gift, the purchase deed. Keep those documents safe, because without proof a correction is difficult to establish.

Suppose you bought a home together, each for half. The market value today is 400,000 euros and there is still 200,000 euros outstanding on the mortgage. One of you contributed 50,000 euros of own savings at the purchase.

Step 1, the net proceeds: 400,000 − 200,000 = 200,000 euros (we leave sale costs out of consideration here).

Step 2, the own contribution first: the partner who contributed 50,000 euros gets that amount back. Remaining: 200,000 − 50,000 = 150,000 euros.

Step 3, the rest fifty-fifty: 150,000 / 2 = 75,000 euros per person.

Final result: the partner with the own contribution receives 50,000 + 75,000 = 125,000 euros, the other partner 75,000 euros. This is a simplified example; increase in value on the contribution, costs, and payments after the breakup can shift the amount. Your notary will calculate this exactly for your file.

If the sale yields less than the outstanding loan, there is a remaining debt. That does not disappear by itself. Towards the bank, you usually remain jointly and severally liable: the bank may hold each of you liable for the full amount, regardless of your mutual agreement. Among yourselves, you usually divide the remaining debt in the same proportion as the ownership, but that agreement does not automatically bind the bank.

If you want one partner to take over the home and the loan completely, the bank must explicitly accept that release from joint liability. The bank assesses whether the taking-over partner can bear the loan alone. Without that agreement, you remain co-debtor for the debt, even after the separation. Discuss this early with your credit institution.

The notary plays a central role in the settlement and division of your assets. In a divorce by mutual consent, you record the agreements about the home, the equity, and the debts in a settlement deed. If you cannot agree in a divorce on grounds of irreparable breakdown, the court appoints a notary-liquidator who prepares the division and mediates.

If you sell the home to a third party, there is no extra division tax. If one of you buys out the other (leaving the undivided co-ownership), you pay in Belgium the division duty, commonly known as the misery tax. In Flanders, a reduced rate of 1% applies in case of divorce or the end of legal cohabitation (under conditions, such as a joint domicile), compared to a normal rate of 2.5%. In Brussels, the division duty is 1%. In Wallonia, an increase has been announced; check the current rate there. The tax is calculated on the full value of the property, not just the part taken over. Because the rules differ per region and change regularly, it is best to have the exact amount confirmed by your notary.

This guide is informative and not legal or tax advice. For your specific situation, it is best to consult your own notary, lawyer, or a recognised mediator.