If you want to keep the family home after a divorce, the first question I would ask is how you intend to pay for it. That means the mortgage, any payment to your spouse, and the cost of running the house afterwards.
You may have good reasons for wanting to stay. The children are settled, the house is close to school, and moving would mean another expense. Your spouse may also be willing to take a payment and leave. Agreement on that much is a useful start.
A property adjustment order can require one spouse to transfer their interest in the home to the other. Before advising you to commit to that arrangement, your solicitor needs to check the figures, the proposed terms, and what happens if the borrowing or payment cannot be arranged.
What is a property adjustment order?
Under section 14 of the Family Law (Divorce) Act 1996, the court can order a transfer of property between spouses or make certain arrangements for the benefit of a spouse or dependent family members. The family home is one property that may be dealt with in this way.
The court also has separate powers concerning occupation and sale. Depending on the circumstances, one spouse might buy out the other, the house might be sold, or one spouse might remain there for a period before a sale. The Courts Service explains these options.
The terms should make clear who will own the property, who can live there, and when any transfer or sale is to happen. Being allowed to remain in the house for a period does not necessarily mean becoming its sole owner.
Can the proposed buyout actually be paid?
Start with a current valuation and the mortgage balance. You need these figures to understand how much equity is available and to assess any proposed payment.
Take this simple illustration:
| Property figures | Amount |
|---|---|
| Estimated market value | €800,000 |
| Outstanding mortgage | €250,000 |
| Equity before costs and other adjustments | €550,000 |
Suppose the proposed terms included a €200,000 payment to the spouse leaving the house. That figure is illustrative; the appropriate payment would have to be assessed as part of the wider settlement.
The spouse keeping the home would need to find that €200,000 and deal with the existing €250,000 mortgage. Without savings or other available funds, the proposal could require total borrowing of €450,000, before additional costs.
A substantial amount of equity can still leave someone unable to fund a buyout. The lender will assess the borrowing, and the person keeping the house needs to work out whether the repayments and household bills are affordable. If the proposed payment cannot be funded, the proposal needs to change.
The payment also needs to be considered from the other spouse’s position. What would it allow them to buy or rent? Would they have enough income to meet their ongoing costs? Those questions belong in the discussion before a figure is agreed.
The mortgage needs separate attention
Agreeing that your spouse will pay the mortgage does not, by itself, release you from the loan. If you are both borrowers, you can remain liable to the lender even after your interest in the property has been transferred.
A 2020 mediation case published by the Financial Services and Pensions Ombudsman shows the practical difficulty. The divorce arrangements provided for the husband to keep the house and pay the mortgage, while the wife gave up her property interest. The bank still refused to take her off the mortgage because the husband’s income did not meet its requirements.
This is why the mortgage needs attention early in a divorce settlement. For example, Bank of Ireland’s process for removing a borrower requires a mortgage application and evidence of how a buyout will be funded.
Before giving up your interest in the home, establish whether the lender will release you, when that would happen, and what the proposed terms provide if it refuses. If you are keeping the home, find out what borrowing is available and the conditions attached to it. An assumption that the bank will agree can leave both spouses with a problem that is expensive to resolve later.
How does the court decide what is fair?
The legal requirement is to make proper provision for both spouses and any dependent family members. There is no automatic entitlement to half the house, and having the property in one spouse’s name does not, by itself, determine the outcome. The court can order a transfer of property owned by one spouse.
Section 20 of the Act sets out the matters the court considers. These include income, resources, housing needs, financial responsibilities, age, and the length of the marriage. Contributions made by caring for children and looking after the home also count.
The question of who gets the house in a divorce therefore requires an examination of the family’s finances and needs. If most of the available money is tied up in the home, both spouses’ accommodation has to be considered when deciding whether one can remain there.
Could the house be sold later?
A delayed sale may allow children to remain in their home while the family adjusts. It can also leave one spouse paying for accommodation elsewhere while their money remains tied up in the property.
The court has powers to deal with occupation of the family home and to make orders for sale that take effect later. Having children does not automatically mean that the house will be retained until a particular birthday. The arrangements depend on the family’s circumstances and the provision needed.
If a delayed sale is proposed, the terms should address:
- The date or event that will trigger the sale.
- Who pays the mortgage, insurance, and other property expenses meanwhile.
- How repairs will be agreed and paid for.
- How the sale proceeds will eventually be distributed.
“We will sell when the children are older” leaves too much undecided. Your solicitor needs to consider how the arrangement will work over the intervening years, including what happens if payments are missed or cooperation breaks down.
Be careful about exchanging pension rights for the house
Keeping the home may be your immediate priority. Before agreeing to retain it in exchange for a smaller share of pension benefits or savings, work out what you would have to live on afterwards.
A person can own a valuable house and struggle to pay the bills. The spouse retaining the pension may face a different difficulty: needing money for accommodation years before those benefits can be drawn. The settlement needs to address both the assets each person receives and the income available to them.
For the pension, establish what it is expected to pay, when payments can begin, and what any proposed arrangement would allocate to each spouse. Your solicitor can advise whether specialist pension advice or an actuarial valuation is needed. Where pension rights are to be shared, the relevant pension adjustment order needs separate attention.
The same care is needed when dividing other assets in a divorce. A rental property may bring in income but carry debt, repairs, and tax liabilities. Money tied up in a business may not be available to fund a payment when it falls due. These details affect whether the proposed settlement can be carried out.
We already agree. What still needs to be checked?
You may reasonably wonder why more work is needed if you have agreed who keeps the house and what the other spouse receives. Reaching agreement can save time and expense. Before advising you to sign, however, your solicitor needs to understand the financial position and whether the terms can be carried out.
The valuation, mortgage balance, and information about the other assets should support the figures being used. If records are missing, identify them. That is part of the purpose of financial disclosure in divorce.
I would also want the proposed terms to address what happens if something goes wrong. What if the lender refuses the borrowing? What if the payment is not made by the agreed date? What if one spouse does not sign the transfer documents? These are practical questions to resolve while the terms are being prepared.
In a divorce, the judge must still consider the agreed arrangements and be satisfied that proper provision exists or will be made. Once an order is made, there may be further documents to sign, lender conditions to satisfy, payments to make, and registration work to complete. The payment and transfer need to be coordinated with any borrowing, and both spouses should know who is responsible for the remaining steps.
Check the tax position before agreeing the transfer
Qualifying property transfers between former spouses under a divorce order can receive relief from Capital Gains Tax and Stamp Duty. The conditions need to be checked before relying on that treatment.
Revenue explains the treatment of transfers between former partners. Its Stamp Duty guidance requires a qualifying order for that exemption and excludes transfers involving a third party.
A later sale needs separate consideration. Under Revenue’s rules for qualifying divorce transfers, the recipient generally takes over the original acquisition date and cost for CGT purposes. If you are considering taking a rental or investment property as part of the settlement, have the likely tax position examined before deciding what that property is worth to you.
What if the divorce has already been granted?
The legislation allows a property adjustment order to be made when the divorce is granted or afterwards, subject to restrictions. For example, if you remarry after the divorce, the court cannot make such an order in your favour by reference to that earlier divorce. Bring any existing orders to your solicitor so the position can be checked.
Changing an existing order is a separate question. Section 22 allows certain orders to be varied, but it does not include an outright property transfer under section 14(1)(a). You should not enter a settlement on the assumption that the transfer can simply be reopened if your finances change.
Before you agree to a property settlement
Bring the proposed terms, the latest mortgage statement, and any valuation you have. Include correspondence from the lender and a short outline of the other assets and debts. If you do not have a document, say so; you can still explain what has been proposed and what concerns you.
Be clear about what you want to achieve. If you hope to stay in the house, the funding needs to be examined. If you are leaving, the payment and your continuing mortgage obligations need attention. Those are questions worth resolving before you commit.
Our divorce solicitors in Dublin advise on property and financial arrangements following marriage breakdown. Contact The Family Practice to discuss your proposed settlement and the information needed to assess it.
*This article provides general information about divorce in the Republic of Ireland. It is not a substitute for legal advice on your circumstances. The documents, procedures, and financial arrangements appropriate to a case will depend on its facts.
Contact Us for Expert Family Law Advice
If you are in need of a Family Law Solicitor in Dublin in a divorce where there are assets involved, please contact us at The Family Practice.
Jeremy Ring is a senior family law solicitor and co-founder of The Family Practice in Dublin.
Over his 15-year career, he has advised clients in divorce and separation cases involving combined assets exceeding €10 million, including business valuations, pensions, and inherited property.
