Living with a partner who owns the house

If you live together without marrying or becoming registered partners, your incomes, property and assets are separate from each other. That means your partner remains the sole owner of their home, even if you live in it (and vice versa). You also won’t be liable for each other’s debts, such as any mortgage debt owed by the homeowner. That’s why it’s wise for each of you to make a list of your financial assets and debts.

You may want to make agreements about paying for shared living expenses, such as groceries, insurance, holidays and mortgage repayments. You could divide them based on your income levels, or you could agree to split the costs equally.

The partner moving in could also contribute a sum of money each month – rent, in other words. For an indication of the amount of rent you can use the Rent Check (Rent Tribunal website).

Bear in mind that it currently costs more to rent than to pay off mortgage interest. In extreme cases, based on the sums in the table, the partner moving in would end up paying more rent than the interest you pay on your mortgage while also paying towards energy bills. That’s why the calculation is just an estimate – neither partner should feel committed to it.

It’s important to re-evaluate any agreements you’ve made, especially if your circumstances change or you want to buy another house together. If you want to read some practical examples of cohabiting arrangements, have a look at our blogs on living together and money matters.

If you both pay towards the mortgage, this could create an unfair financial situation that could get worse as time goes on. After all, if your home equity increases as you pay off your mortgage or due to developments in the housing market, only the homeowner benefits.

A similar situation may arise if the partner who’s moving in invests their money in the house, such as a new kitchen, renovations or solar panels. If you split up without making a record of these investments, the partner moving out might lose all of their investment.

Many people living together are willing to share the benefits and costs of increases or decreases in the home’s value. To put this into practice, you could:

• sell 50% of the property to the partner moving in. This is relatively easy to sort out, but you’ll need to pay notary fees, land registry costs and property transfer tax (at a rate of 0% or 2%). If the house is tied to a mortgage, the lender will need to give their consent for part of the property to be sold to the other partner. The lender will probably want the partners to be jointly and severally liable for the mortgage, putting both their names on it, and keep the original mortgage registration for the whole property intact.
• Draw up a cohabitation agreement including a clause that both partners are entitled to their portion of an increase in the property’s value if the home is sold within a certain timeframe – the ‘meerwaardeclausule’. This clause entails that you both have an equal stake in the property’s value (whether it increases or decreases) from the moment you live together. It’s wise to ask a notary to help you to navigate the legalities, such as how to avoid paying property transfer tax under the tax rules governing community property.

If you marry, you could both become the owner of the home and be liable for any mortgage debts. If that’s what you want, you must draw up a prenuptial agreement to set out each partner’s wishes. We advise you to talk to a notary or tax adviser about the legal and tax consequences of getting married.

A cohabitation agreement is an effective way of recording arrangements for paying shared living expenses, mortgage and who has what stake in the property’s equity. While you can draft a cohabitation agreement yourself, we advise you to have it formally drawn up by a notary.

A formal cohabitation agreement may help you to save money, as you’ll qualify as tax partners for your income tax return. Your cohabitation agreement can even set out arrangements in terms of spousal or child maintenance. This could be useful for unmarried cohabiting couples. If you split up, neither of you is entitled to maintenance, regardless of how long you’ve lived together.

A cohabitation agreement can arrange for the community property to be transferred to one partner upon the other partner’s death. However, it can’t arrange for the surviving partner to inherit the house from the homeowner, as cohabiting couples are not each other’s heirs. So it’s worth noting that the surviving partner doesn’t automatically have the right to stay in the house.

If you live together and haven’t written a will, the house will be inherited by the homeowner’s family. The surviving partner inherits nothing and may even be evicted from the property after six months. But even if the homeowner’s family allow the surviving partner to remain in the property, things might still get complex. For instance, under Dutch tax law, the surviving partner’s quiet enjoyment of the property could be considered a taxable gift and therefore liable to gift tax. You can avoid this situation by writing a will and making each other your heir.

Generally, you will accrue a pension through your employer by paying into a pension fund. In many cases, your pension scheme will include a partner’s pension. If one partner passes away, the surviving partner will receive a partner’s pension every month. To be eligible to receive a partner’s pension, your partner must be registered with your pension fund. You must also be able to prove that you live together. As many pension funds only accept a copy of a notarised cohabitation agreement, it’s extra important for you to have one drawn up.

You’ve read about some things you should consider if you’re going to live with a partner in a home they own. To avoid trouble down the line, it’s wise to make clear arrangements and record them in a cohabitation agreement (validated by a notary, ideally). Writing a will can also help to avoid distressing situations if a partner dies.

• Cohabiting: the financial consequences
• Buying a home with your partner? Here’s what to make agreements about first
• Divorce and your tax return: what to do about your mortgage?