Q&A Should I keep the house after the divorce?

SHOULD I KEEP THE HOUSE AFTER THE DIVORCE?

Wives always want to keep the house and husbands always want their pension. It is pretty predictable sometimes what parties are going to hold out for.

But should you keep the house? It won’t be easy in most cases to live at the same standard you lived while married. That is because where there was once two incomes, now there is only one. Even assuming there are children and child support checks, still, you won’t be able to live at the same standard post divorce. (And keep in mind that child support checks stop at 21 or sooner if the other party loses his or her job).

It may not make sense to keep the house if your income does not support making mortgage payments without child support checks or temporary maintenance payments. So before the final agreement is signed, you want to think long and hard about whether you can really afford the house alone. And even if you plan on selling the house at a later date, you want to think about the capital gains tax if there is a huge amount of equity in the home. The capital gains tax will be levied on the amount you gained from the sale. For example if you bought the house for $100,000 and you sold it for $200,000, the gains will be on the $100,000 you gained in the sale. The gains tax will be somewhere in the region of 15%. So you would pay $15,000 if your gain is $100,000. Does that make sense for you under your particular circumstances?

Only you can really answer that question. Consider your budget carefully. Hire a certified divorce planner if possible.

Check out this additional post for 10 Frequently Asked Questions about Divorce Real Estate

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Last updated March 2017

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