Separated from girlfriend, description of 50% share in the land register
June 12, 2009 | 20,00 EUR | answered by Dr. Dr. Danjel-Philippe Newerla
Good day,
I have a question:
Back then, my girlfriend and I renovated a house together. We both signed the loans together and she is also listed in the land register for 50%. Unfortunately, the relationship has ended.
I moved into the house alone at that time and have been solely responsible for all the ongoing loans, etc.
Now we would like to transfer the loans to my name and in this context, of course, also have her entry in the land register deleted.
I would like to know what the most cost-effective way to transfer the land register is. Everything is settled with the bank, I can take over everything immediately, and there are no costs on the bank's side.
But how can I transfer the land register in a way that may incur no or only minimal property transfer taxes and notary costs?
A brief overview of the property: The house was purchased for 150,000 euros, renovated for approximately 120,000 euros, and now has a value of approximately 325,000 euros (appraisal available). As mentioned, my ex-girlfriend is listed for 50% in the land register and in the loan agreements, but she has never paid anything, as can be proven.
What can I do, what is the best possible approach? Is a gift more sensible than a "sale"? What amounts should be used? My ex-girlfriend is not concerned about money, both of us just want to keep the costs low for me!
Thank you for your efforts,
Björn Steffen
Dear inquirer,
first of all, thank you for your inquiry!
I would like to address your questions considering the situation you have described as follows:
1.) How can I transfer the property in the land register in a way that minimizes or avoids property transfer tax and notary costs?
You can avoid property transfer tax by transferring the property as a gift. This is because a gift does not constitute an acquisition within the meaning of the Property Transfer Tax Act. For more information, please refer to the following informative link in your case:
http://www.ofd.niedersachsen.de/master/C3201972_N9684_L20_D0_I636.html#faq_177
However, in the case of a gift, it should be noted that gift tax may be applicable on your end under the Inheritance and Gift Tax Act.
You may indeed be able to save on notary costs for the land register entry. This is related to § 311 b para. 1 sentence 2 of the German Civil Code, which I have included below for your better understanding:
§ 311 b BGB
1) A contract by which one party undertakes to transfer or acquire ownership of real property requires notarization. A contract concluded without observing this form will be valid in its entirety if the transfer of ownership and entry in the land register take place.
…………
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Therefore, for the transfer of ownership from your girlfriend to you, you will need the transfer of ownership and entry in the land register.
The transfer of ownership, i.e., the formal contract for the land register amendment, does not necessarily have to be notarized; an official certification is sufficient, which you can then present to the land registry office.
The local city (administration) can inform you where you can have such an official certification done in your area.
2.) What can I do, what is the best course of action? Is a gift more beneficial than a "sale"?
As previously mentioned, a gift has the advantage of generally not incurring property transfer tax, but a gift may not be feasible in your case.
According to § 516 of the German Civil Code, a gift must always be free of charge, i.e., without consideration. However, in your case, there is consideration involved, namely the assumption of your girlfriend's credit obligations towards the bank.
Therefore, I would recommend a sale (transferring for consideration) to you, as this would also save on gift tax on your end, provided you are not engaged in real estate business activities, which I do not assume based on your description.
3.) What amounts should be used?
Since, according to your description, your girlfriend has not yet paid any loan installments, and you have been solely responsible for this, a fair purchase price would be half of the market value of the property minus half of the loan installments/credits you have paid so far.
I would like to conclude by pointing out the following:
The legal advice I have provided is based solely on the information you have provided. My response is only an initial legal assessment of the situation and cannot replace a comprehensive review of the facts.
Adding or omitting relevant information can lead to a completely different legal assessment.
I hope my explanations have been helpful to you. You are welcome to contact me through the follow-up option on this platform or via my email address.
I am also available for further legal representation. In the event of engagement, I would credit the initial consultation fee paid in this forum in full.
I wish you a pleasant Monday afternoon and a good start to the week!
Sincerely,
Dipl.-Jur. Danjel-Philippe Newerla, Attorney at Law
Heilsbergerstr. 16
27580 Bremerhaven
kanzlei.newerla@web.de
Tel. 0471/3088132
Fax 0471/3088316
