Real estate purchase as a couple: Marriage, PACS and Cohabitation - What differences and implications?
Buying a property as a couple involves financial and legal consequences that depend on the marital status of the buyers. Here is a detailed guide to the differences between marriage, PACS and cohabitation regimes.
Married couple
Three possible matrimonial property regimes
Community of property reduced to acquests : default regime, property acquired after marriage is divided equally, regardless of the contribution of each spouse. Property acquired before the marriage remains the sole property of the original purchaser.
Universal community: all property acquired by the couple, including before marriage, is divided equally. Certain assets remain specific to each spouse, in particular those acquired by inheritance, gift or legacy. This regime is advantageous thanks to the "full attribution clause", which allows the surviving spouse to keep half of the assets that should have gone to the descendants without paying estate fees.
Separation of property: each spouse remains the owner of his or her property, and the property purchased together is divided in proportion to the contribution of each spouse. In the event of separation, everyone recovers the amount they financed when the property was sold.
Couple pacsé
Two possible regimes
PACS before 2007
Default indivision regime, the property is divided equally, regardless of the contribution of each spouse.
PACS after 2007
Default separation of property regime, property remains the property of each spouse, and property purchased together is divided in proportion to each spouse's contribution. In the event of death, the joint ownership regime applies by default for the benefit of the heirs. Spouses can make reciprocal wills to protect the surviving spouse.
Tax considerations and benefits for couples
Civil couples also benefit from certain tax advantages, such as joint taxation and allowances for donations between PACS partners. However, they must draw up reciprocal wills to protect the surviving partner in matters of succession.
Cohabiting couple
Two real estate purchase solutions
Purchase in joint ownership
Each spouse is the owner according to his contribution to the purchase. In the event of separation, everyone recovers their share proportional to their contribution when the property is sold.
Purchase via a real estate company (SCI)
A more complex and costly solution, but more sustainable and organized, to better manage issues related to the withdrawal or death of one of the spouses. In the event of separation, the value of the property is divided into shares proportional to the investment of each cohabiting partner. In the event of death, several solutions are possible to protect the surviving spouse, including the approval clause and the cross-dismemberment of ownership.
Tax considerations and benefits for couples
Cohabiting couples do not benefit from the same tax advantages as married or civil couples. They must take additional measures, such as the creation of an SCI, to optimize their patrimonial situation and protect the surviving spouse.
Drafting a contract or agreement: it is important to put in writing the terms of the purchase, the distribution of ownership shares and the obligations of each party. This avoids future conflicts and clarifies responsibilities.
Anticipate situations of separation or death : it is essential to anticipate the consequences of these events on the ownership of the property and to take the necessary steps to protect the surviving spouse or facilitate the division of the property in the event of separation.
Consult a professional: a notary, a lawyer or a wealth management advisor can help you choose the plan best suited to your situation and draft the necessary documents to secure your real estate purchase as a couple.
Posted on 10/05/2023 by
Cyril POTTIER
Entrepreneur and founder of the agency GABRIEL FRANCE, my career began in the field of accounting, but my passion for real estate led me to this captivating adventure. With GABRIEL FRANCE, we bring our expertise to every stage of real estate, from purchase to sale, including rental management. Through each transaction, our goal is simple: to ensure your satisfaction.
