For a couple married under the community property regime, divorce entails the liquidation of the matrimonial property regime and the division of assets. Stéphanie Swiklinski, a qualified notary, explains how this works in three concrete cases.
What assets must be divided when liquidating the community?
When spouses choose to divorce by mutual consent without a judge, an agreement must be drawn up between the two parties, including a liquidation statement of the matrimonial property regime. If you have real estate assets (house, apartment, etc.), your notary's intervention will be mandatory, as the liquidation will concern assets subject to land registration with the tax authorities. Please note that the division only concerns joint assets and debts. Private property is not shared; each spouse takes back the property he or she owned. To enable your notary to draw up the deed, you will need to provide him or her with certain information:
- title deeds for each property and its valuation,
- vehicle registration documents,
- bank statements,
- current loans with amortization schedules...
You'll also need to provide a letter of disassociation from your bank if only one of you takes over the current mortgage. This disengages the spouse, since when spouses take out a mortgage together, they are considered to be jointly and severally liable. If one of the spouses is no longer able to meet his or her repayments, the other will have to repay the loan in full. A request must therefore be made to the lending institution for the loan to be dismantled, so that the principle of joint and several liability is cancelled.
What should be done if one of the spouses wishes to keep the main residence?
The main residence (or other community property) may be allocated to one of the spouses at the time of division. This is often the case when a couple has children and wishes to disrupt them as little as possible by selling their childhood home. In this case, one of the parents keeps the property. In return, he or she is obliged to buy back half of his or her spouse's house or apartment, i.e. 50% of its value. This financial transaction is known as a "soulte repurchase". The amount of the balance corresponds to the value of the spouse's share of the house. The determination of the balance will vary, depending on whether or not you have an outstanding loan (which would have been contracted for the purchase of the property). Your bank must provide you with the amortization schedule to determine the outstanding principal on the loan. You then have all the information you need to calculate the amount of the balance to be paid in order to become the sole owner. The formula is as follows: amount of the balance = (value of the house / 2) - (outstanding capital on the loan / 2).
Can I buy or sell property during the divorce?
Your notary can only advise you not to buy a property while you're getting divorced. When you are married under the community of property regime, the community lasts as long as the marriage lasts. Until the divorce is finalized, any property purchased by one of the spouses may be considered joint property, and will have to be divided. To avoid complications, it may be wiser to wait until the divorce proceedings have been completed.
It is also common practice to sell a joint property during the divorce. Should you really rush to sell in the hope of avoiding the 1.8% sharing duty in 2021 (calculated on the net community assets = value of the property - debts)? The question now seems to have been settled, with a ministerial response dated September 1, 2020 specifying: "the proceeds of the sale must, even in the absence of partition, be included in the liquidation statement of the matrimonial property regime appended to the agreement, which must include all of the couple's joint or undivided property" (Rép. min. n° 10159, JOAN Sept.1, 2020). The risk of non-compliance is a tax reassessment!
Stéphanie SWIKLINSKI