Can we sell the property in a divorce?
Options in a divorce: what to do with the property?
Joint sale
The most common and often most sensible solution. Both partners sell, split the proceeds and go their separate ways. In Dresden, such a sale takes three to six months.
Buy-out by one partner
One partner buys out the other. Prerequisite: sufficient financial strength or the bank's willingness to transfer the loan to a single person. The buy-out price is based on the current market value — not on the original purchase price.
Letting
Both remain owners and the property is let. Sounds pragmatic, but in practice often leads to conflicts over management, maintenance and the distribution of profits. Only advisable if both sides remain able to communicate.
Physical division
For larger properties (e.g. a two-family house) a physical division may be possible. Rare in practice, but there are cases where it works.
In my experience, a joint sale is the best solution in 80 percent of cases. Not because the other options are bad — but because they require a degree of cooperation that is rarely present in a separation situation.
Are you facing this decision?
Discuss without obligationHow is the property accounted for in the equalisation of gains?
The equalisation of gains (Zugewinnausgleich) is the central topic for divorce properties. Put simply: the increase in assets during the marriage is split in half.
Example: in 2016 a married couple bought a flat in Striesen for €200,000 (each owning half). In 2026 the flat is worth €300,000. The gain is €100,000 — each partner is entitled to €50,000 of the increase in value plus their original share.
It becomes more complicated when:
- Only one partner is named in the land register
- Different equity shares were contributed
- One of the partners financed renovations
- A prenuptial agreement exists that sets out different arrangements
Striesen example
Do you need a neutral valuation for your divorce?
Discuss without obligationJoint loan: what happens to the financing?
Option 1: Sale and loan redemption.
The sale proceeds repay the remaining loan. If the proceeds exceed the remaining debt, the surplus is split. Note: an early repayment penalty may apply.
Option 2: Buy-out by one partner.
The bank must agree to release the other partner from liability. This only happens if the partner taking over is sufficiently creditworthy on their own. In practice this fails more often than expected.
Option 3: Continue paying jointly.
Theoretically possible, in practice a recipe for ongoing conflict. Only acceptable as a short-term interim solution.
What happens if we cannot reach an agreement?
If no agreement is possible, the partition auction remains as a last resort. Almost always the worst option for both sides.
Joint sale
- •Market value is achieved
- •Both partners have a say
- •Professional marketing
- •Time frame: 3–6 months
Partition auction
- •20–30 % below market value typical
- •Bidders exploit the forced situation
- •High procedural costs
- •Both partners lose money
If no agreement is possible, any co-owner can apply for a partition auction at the local court (Amtsgericht). This is the last resort - and almost always the worst.
Why? Partition auctions in Dresden typically achieve 20 to 30 per cent below market value. The reason: bidders know that it is a forced sale and push the price down. Both partners lose money.
A case that has stayed with me: a married couple in Blasewitz could not agree. The flat had a market value of 340,000 euros. At the partition auction it went for 248,000 euros. After deducting the procedural costs and the remaining loan, less than 30,000 euros was left for each partner. Had they agreed on a joint sale, it would have been over 70,000 euros each.
When is the best time to sell?
| Phase | Task | Recommendation |
|---|---|---|
| Separation | Clarify who moves out and pays the instalments | Agree in writing |
| Year of separation | Valuation, documents, agreement | Use the time actively |
| Sale | Marketing and negotiation | Don't wait for the divorce |
| Divorce | Settle equalisation of gains with the proceeds | Point of contention already resolved |
The optimal sequence:
- Separation: clear communication about who moves out and who pays the instalments
- Year of separation: use this time for the valuation, gathering documents and agreeing on how to proceed
- Sale during the year of separation: possible and often sensible. You do not have to wait for the divorce to become final
- Divorce: with the sale proceeds, a significant point of contention is already resolved
Many people wait until after the divorce to sell. This is rarely wise. The longer the property remains in joint ownership, the higher the running costs and the potential for conflict.
How is the value of the property determined in a divorce?
For divorce properties I always recommend a neutral market value appraisal. Cost: €1,500 to €3,000. Why?
It creates an objective basis for negotiation
It is recognised by the family court
It prevents one partner from setting the value artificially high or low
It speeds up the agreement considerably
Alternatively: a jointly commissioned agent's estimate. Cheaper, but not admissible in court.
What taxes apply when selling property in a divorce?
Speculation tax
If the property has been owned for less than 10 years and was not continuously owner-occupied, speculation tax applies. Special case owner-occupation: tax-free if owner-occupied in the year of sale and the two preceding years.
To the speculation tax calculatorReal estate transfer tax on buy-out
When one partner takes over the other's share, real estate transfer tax normally applies. Exception: transfers between spouses as part of the division of assets in a divorce are tax-free (Section 3 No. 5 GrEStG).
Do I need a lawyer when selling property in a divorce?
For complex asset situations, contested valuations or when one side refuses to cooperate, you need a specialist lawyer for family law. In Dresden there are several specialised law firms with experience in property divorce cases.
Tax note: Non-binding guidance, without warranty – not a substitute for tax advice.
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