Valuing Marital Property for a Divorce

This page outlines the key points relating to the valuation of marital property for a divorce. We will also go through the process of administration of property assets during a divorce in order to avoid any potential disputes.

A couple divorces every four minutes in France. With this being such a common occurrence, the divorcees often have an idea of what to expect from the process in advance. They know that there will be complications. They expect negotiations around the custodianship of children and child support. However, few are prepared for the challenge that the administration of their real estate assets could present. Widespread received ideas relating to this subject often lead to complications for the respective parties during a divorce.

If you or your client are in the process of divorcing in France and are seeking professional valuation advice on the matter, contact Samuel Thompson via email ([email protected]) or telephone (+44 7933 239126 / +33 07 45 55 81 46). Samuel can provide an English-speaking introduction to the specialist services tailored to your personal situation.

How are Real Estate Assets Allocated During a Divorce?

Two options are available to the parties during a divorce in relation to the property they possess in common.
Firstly, one of the parties may stay residing in the property jointly owned whilst the other moves out to live elsewhere. In this event, the person staying in the property must ‘purchase’ the part that the other possesses. This could be made directly or indirectly:

  • If the purchase is direct, the party retaining the property will often remortgage to become the sole proprietor. They will release the finances necessary to reimburse the other party for their stake.
  • For an indirect purchase, the value of the property is attributed to the party who conserves it. The other will receive in lieu other marital assets to an equivalent value.
    Alternatively, both parties may move out and sell the property. The sales receipts will thus become marital assets which are then shared between the divorcees. In either case, it is imperative to accurately determine the value of the property in question.
marital property in a divorce
French marital property in a divorce

Why is Valuation of Marital Property in a Divorce so important?

For many couples, the family property is their most valuable joint asset. As with all of their other assets, the value of this property must be appropriately split for the divorce. It has to be fair and equitable. However, during the divorce process, the couples, their lawyers and the tribunal cannot reasonably take into account their property holdings without knowing their true value. This is where the role of a professional valuer is vital.

Professional valuers will accurately determine the Market Value of the concerned property assets. They will consider a full range of factors including their physical condition and the state of the local market. They will also follow recognised valuation methodologies to decide upon the true value of the property or properties in question. This will allow all those concerned in the process to be reassured that each of the parties will receive their fair proportion of the joint assets, whether the property is retained by one of the couple or is sold.

What Impact Does Divorce Have on Taxation and Financial Planning?

The valuation of real estate assets during a divorce also plays an important role in post-divorce financial planning. Too many couples are not aware of the impact a divorce will have on their tax situation.

For instance, if following a divorce a property is sold for €500,000, the receipts will not necessarily be shared equally between the two parties. In many cases capital gains tax (‘plus-value’) will first have to be paid. As the sale is considered as earnings which must be taken in to account, this may modify the tax band applicable to one or both parties.

Furthermore, the divorce could be subject to a tax audit. It is therefore essential that divorcees engage with their solicitor and financial advisor in order to:

  • Ensure that finances are in order.
  • Protect as far as possible against taxes, expenses and other potential financial losses.
  • Create a realistic financial plan for life post-divorce.

Understanding the true value of the property assets in question will evidentially be fundamental to accurately address these matters. Even the most qualified solicitors or financial advisors will not be able to assist without this accurate valuation first being made.

marital property in a divorce with legal expert

With an accurate valuation of real estate assets being so crucial in the event of a divorce, engaging with a professional valuer who is specialist in the area is imperative. Berthier & Associés have a proven track record in this domain and can offer an English-speaking introduction for those with assets in France subject to a divorce. Contact Samuel Thompson for an introduction to valuation services appropriate to your individual circumstances.