Marriage and mortgages: How owning a property can be affected by your wedding

You may think this question is a little peculiar. I must concede that when I hear “mortgage”, the word “marriage” isn't the first thing that comes to mind. The same surely applies to many buyers of real estate in the Netherlands, particularly expats. But I assure you that a marriage has everything to do with a mortgage.

The basic steps of a mortgage

First, imagine that after looking far and wide, you have finally found your Dutch dream home. You are very excited to be its new owner and to transform it into your new home.

However, before being able to do so, the sales process has to be concluded; you have to deal with the financing of the purchase sum. If you plan to take a loan from a bank to finance the purchase, the bank will request that you provide some form of surety that you will indeed repay your debt.

Therefore, your home will be encumbered with a mortgage as a right of security. Prior to agreeing to a mortgage, the bank will check your personal details, such as the income you generate, your possible other financial obligations and liabilities - and your marriage situation.

So what if you’re married?

I am often contacted by a married individual who originates from abroad and whose spouse is still located in their home country. Such expats are usually employed by a non-governmental organisation or a multinational company, and they tend to have very high salaries. Their income alone, therefore, is usually sufficient for the bank to loan them the money they require to buy a house in the Netherlands. 

However, the fact that they are married can be a hurdle when the bank assesses whether it should lend the buyer any money. But why should this be important? Their spouses aren’t co-buyers, nor are they going to co-sign the loan agreement with the bank. Why does it matter if the buyer is married?

Westvaer notary can help with your legal questions about real estate and mortgages.

Communal rights of ownership

Getting married is a very joyous event, but few future spouses realise that their marriage impacts their life beyond their emotional relationship. It also affects their financial relationship and even ownership of properties they own prior to and after their marriage celebration.

Once your marriage is solemnised in the presence of the authorities in the country in which you marry, a community of property may come into existence automatically.

This means that, by law, spouses may share some or all property and bear some or all liabilities together, regardless of by whom these were acquired or contracted, or whether it was before or during the marriage. What is known as a property regime comes into being upon completion of a marriage.

Limited community of property

In the Netherlands, the law states that for weddings that took place on or after January 1, 2018, a regime of limited community of property applies. This regime means that everything acquired by the spouses during the marriage falls into this community of property and, therefore, belongs to them jointly. 

The only exception to this is anything that one of the spouses receives as a gift or an inheritance. Such donated or inherited assets, along with assets individually acquired by the spouses prior to the marriage, are considered private.

This means that a house bought by one spouse individually during the marriage will also be part of the community of property, even if the sales contract only lists the name of one spouse.

General community of property 

For marriages that took place before January 1, 2018, a general community of property applies, which means that the spouses come to own all property and bear all liabilities jointly due to the marriage, whether or not these were acquired or contracted during or before the marriage.

One can easily avoid any of this from happening by simply making a nuptial agreement prior to or during the marriage, in which spouses specify whether there is indeed a community of property between them.

Be aware of foreign laws

It is common for expats to have been married abroad, prior to their arrival in the Netherlands. They often come alone, with their family members sometimes following later. Dutch law does not typically apply to the marital property regime of such expats, and it may be cumbersome for them to have ascertained which law then applies.

Once the applicable law is determined, the next question is whether it created a community of property or whether the spouses kept their own property after their marriage celebration. 

Having a nuptial agreement can shed some light on these issues, but third parties (such as the mortgage bank) usually don’t understand if the provisions included in the agreement are in accordance with the applicable foreign law.

Sometimes, the mortgage bank may request that the buyer produce a declaration made by a Dutch notary, stating the legal effects of the foreign legal system. In this situation, it is essential to consult an internationally minded notary to determine the appropriate course of action.

Think ahead and prevent any problems

In conclusion, a marriage has everything to do with a mortgage. When initiating a mortgage loan application, you should also be extremely wary of the effects your marriage may have on the possibility of actually acquiring the loan. 

It is important to consult with a Dutch civil law notary firm as soon as possible to prevent any legal issues during this process.