Divorce Property Sale & Division of Assets Guide | Procedures and Precautions in Sendai

Divorce and Real Estate Issues Cannot Be Separated

When deciding to divorce, one of the largest issues is how to handle real estate. Especially if you own a home, you face complex decisions: "Who will live where and how?" "What about the mortgage?" "How do we proceed with asset division?" and more.

Because divorce situations tend to be emotionally charged, it is important to approach real estate matters calmly and make decisions based on accurate knowledge. This article explains how to handle real estate in divorce, from basic knowledge to specific procedures.

Understanding the Basics of Asset Division

What is Asset Division?

Asset Division is a system where assets accumulated by spouses through cooperation during marriage are divided upon divorce. It is defined in Article 768 of the Civil Code and can be requested within 2 years of the divorce.

Real Estate Subject to Asset Division

Asset division applies to real estate acquired during marriage. The following cases are included:

On the other hand, the following cases are generally excluded from asset division:

Division Ratio

The ratio of asset division is generally 50-50. Even a housewife or househusband is deemed to have contributed to asset accumulation through housework and childcare, so typically the assets are divided equally.

Three Options for Handling Real Estate During Divorce

There are three main options for handling real estate during divorce.

Option 1: Sell and Convert to Cash

This is the simplest method with the least potential for disputes.

Advantages

Disadvantages

Real estate in Sendai has appreciated in value since purchase in some cases, depending on the area and property condition. Properties along subway lines or in central Aoba Ward are particularly easy to sell and offer the potential for quick cash conversion.

Option 2: One Spouse Continues Living in the Property

It is common for one spouse to continue living in the property due to reasons such as not wanting to change schools or living environment for children.

If the title holder continues living:

If the non-title holder continues living:

Option 3: Use as a Rental

This involves renting the property to a third party while keeping it as shared ownership and dividing the rental income. However, since you must manage the property jointly after divorce, this often becomes a source of disputes and is not generally recommended.

Dealing with Remaining Mortgage

Cases where a mortgage remains at the time of divorce are extremely common and pose the most challenging issue.

Relationship Between Remaining Mortgage and Property Value

First, it is important to accurately determine the current market value of the property and the remaining mortgage balance.

Mortgage Name and Repayment Issues

Since a mortgage is a contract with a financial institution, divorce does not automatically change the mortgage name or guarantor's responsibility.

Points to Note

Practical Steps to Take

Taxes on Real Estate Sales in Divorce

Tax considerations are also important when selling real estate.

Capital Gains Tax

When selling real estate at a profit (capital gains), capital gains tax is assessed.

*Includes special reconstruction income tax

30 Million Yen Special Deduction

When selling a home, the 30 million yen special deduction for residential properties may apply. However, there are important considerations for divorces:

Gift Tax on Asset Division

When transferring real estate as asset division, gift tax is generally not assessed. However, if the amount divided significantly exceeds what is socially appropriate or if the divorce is recognized as a means to avoid gift tax, gift tax may be imposed.

On the other hand, the person transferring the property may face capital gains tax, so care is needed.

Procedure Flow and Required Documents

Creating a Divorce Agreement

Any agreed terms regarding real estate must be clearly stated in a divorce agreement. If possible, have it made into a notarized document so that it can be forcibly executed if the other party fails to comply.

Documents Required for Title Transfer

The following documents are needed for real estate title transfer (ownership registration):

Costs of Registration Procedures

How to Seek Advice About Divorce-Related Real Estate in Sendai

Since real estate issues related to divorce involve complicated intersections of law, taxes, and real estate transactions, consulting with professionals is important.

How to Choose a Consultation Source

Sendai has many law firms specializing in divorce matters and professionals with experience in mediation at the Sendai Family Court. One option is to first consult with the Sendai Bar Association's Legal Consultation or Legal Aid Society Sendai.

Request Property Appraisals Early

To proceed with asset division negotiations, it is essential to know the accurate market value of your property. Request appraisals from multiple real estate companies to grasp an objective price.

Summary

Handling real estate during divorce requires choosing the best method based on your situation—whether selling, changing ownership, or continuing to live in the property. Especially when a mortgage remains, coordination with the financial institution is necessary, and prompt action is important.

For inquiries about property appraisals and sales, please contact エムアセッツ, familiar with Sendai real estate conditions at Contact. We will work with you to determine the best approach for your situation.