In a divorce, the division of real estate—usually the shared house or condominium—is one of the biggest points of contention. In addition to the market value of the property, outstanding loans and the question of who continued to make payments after the separation play a particularly important role. In several rulings, most recently in 1 Ob 84/24w, 1 Ob 9/24s, and 1 Ob 113/23h, among others, the Supreme Court has clarified the principles according to which real estate and debts are to be taken into account in the division process.
What should be included in the breakdown?
In principle, the division procedure distributes assets that were acquired during the marriage and served the joint life. This includes, in particular, the marital home or joint house, but also other real estate if it was used by the family. As a rule, real estate acquired before the marriage, gifts, or inheritances are not included in the division, as long as they were not incorporated into the marital property. However, if significant joint funds were invested in such real estate during the marriage, the resulting increase in value may well be considered a marital achievement.
Market value minus debts: the key calculation step
According to the case law of the Supreme Court, the division of assets is generally based on the market value of the property at the time of the first instance decision. The decisive factor is the price that could be achieved in a sale in fair business transactions. As a rule, the debts associated with the property ("connected") are to be deducted from this market value, as they existed at the time of the dissolution of the marital partnership. The "net asset value" resulting from this difference is then distributed between the spouses according to the distribution key. This ensures that not only the market value but also the joint burden of loans is taken into account.
Those who continue to pay can get more
Particularly relevant in practice are situations in which one of the spouses continues to pay the loan installments alone after the separation. In its current case law, the Supreme Court states that these subsequent repayments must be taken into account in the compensation payment in favor of the spouse who does not receive the property but continues to make loan payments after the dissolution of the marital partnership. These payments must be added to the mathematically determined compensation payment because they have reduced the joint loan and thus increased the value of the property. Conversely, the loan installments of the spouse who retains the property do not reduce the compensation payment to the other spouse, as this value advantage benefits him or her personally.
Prenuptial funds and special benefits
In many division proceedings, the question arises as to how premarital savings or gifts from third parties (such as parents) should be taken into account. If, for example, substantial premarital funds or gifts were invested in the purchase or repayment of the real estate loan, this may play a role in determining the division of assets. Exceptional contributions by one spouse—such as extensive personal contributions to construction or renovation—may also be an argument for a greater share in the increase in value, depending on the circumstances. In this case in particular, it is important to carefully document the financing and personal contributions.
Why early counseling is so important
The division of real estate assets following a divorce is complex and heavily influenced by the current case law of the Supreme Court. Even the choice of the correct valuation date, the appraisal of the property, or the allocation of loan repayments can result in significant differences in the equalization payment. By clarifying early on which documents are required—such as loan agreements, bank statements, appraisals, and agreements—and how your own position should be assessed legally, you can avoid costly mistakes and protracted proceedings. Sound legal advice helps you develop realistic expectations and find a strategy that takes into account both the financial and personal aspects of the separation. As divorce attorneys in Vienna, we guide you through the entire division of assets process—from the initial assessment to the final settlement.
