In the case of a sale, the net proceeds achieved, after deduction of remaining loans, are divided according to the co-ownership shares or as contractually agreed.
When one partner takes over the property, they must pay the other partner half of the market value of their share and generally continue or refinance the existing loan on their own.
If an amicable solution cannot be reached, the last resort is a partition auction – however, this typically achieves a lower sale price than a regular sale.
Before making a final decision, it is often worthwhile to compare the two options: the net proceeds from a sale can generally be predicted more reliably than the long-term financial benefit of taking over the property with ongoing financing.
In the case of a takeover, it should also be clarified early on with the financing bank whether and under what conditions a refinancing to only one of the previous borrowers is possible.
Please note: the content of this article is provided for general information only and does not constitute legal, tax, financial or investment advice. It is not a substitute for individual advice from a licensed lawyer, tax adviser or financial adviser. Despite careful research, we accept no liability for the accuracy, completeness or currency of the information provided. For specific legal or tax questions, please consult a qualified professional adviser.