Guide
Equalization of gains and property: what house and mortgage mean at divorce
The equalization of gains (Zugewinnausgleich) is often the largest financial issue at divorce. What matters is the property value, remaining debt, ownership shares and who takes over the property.
What is the equalization of gains?
The equalization of gains (Zugewinnausgleich) is the statutory equalisation of wealth accumulated during the marriage. It applies when spouses live under the statutory matrimonial property regime of community of accrued gains (Zugewinngemeinschaft).
In simple terms, the increase in each spouse's wealth during the marriage is compared. Whoever has accumulated the greater gains must in principle compensate the other for half the difference.
A property can be the most significant asset. At the same time a mortgage is often still outstanding, which reduces the economic value. This is why not only the market value of the property counts — the remaining debt is also decisive.
How is the property value taken into account?
The starting point is the market value of the property. The remaining mortgage debt is deducted from this figure. The result is the net economic value.
Worked example
The actual equalization of gains may differ, as other assets and initial wealth are also taken into account.
What happens when one partner takes over the property?
If one partner takes over the property, a buyout payment to the other partner is usually required. Financially, the key question is whether the taking-over partner can finance this payment.
A buyout can be funded from equity or by increasing the loan. Not every bank accepts this structure. This is why the equalization of gains must be linked to the mortgage assessment. A numerical agreement helps little if the bank does not approve the financing.
What role does the mortgage play?
The mortgage reduces the economic value of the property. At the same time it remains a separate obligation towards the bank.
This is a common mistake: a family law agreement governs the internal relationship, but does not automatically affect bank liability. This is why equalization of gains, change of borrower and land register transfer should be prepared together.
When is professional support useful?
A solicitor should review the legal equalization of gains. A tax adviser can assess the tax implications. A mortgage adviser checks whether the planned solution is bankable: buyout amount, monthly payment, remaining debt, collateral and alternative lenders.
Thomas Brauner supports you on the financing side. He analyses whether the takeover is viable and whether a change of borrower or follow-up financing is possible.
Frequently asked questions
Align equalization of gains and financing early
A buyout only makes sense if it is also financeable. Thomas Brauner checks free of charge and without obligation which mortgage solution fits your divorce situation.