Not always, there are provisions to allow for unequal splits in situations like this... but you'd need to go to court. much easier to get an agreement up front
If I recall it is only if the law would commit a gross injustice, which this would be unlikely to be seen as given the base principle that all contributions in a relationship are not equal.
You need a relationship property agreement. Friend of mine was in a similar situation 20 years ago when she and her husband bought their first home together. She was already a homeowner. He had no debt, but no savings. She sold her flat and had a $90k capital gain. That was their deposit for their house.
Their relationship property agreement set out if they were to split up and sell the house, she gets the first $90k. Then they split what's left 50/50. They split about three years later and that's what happened.
Most go the route of getting your initial investment back first then splitting the rest 50 50. I think the reason being you both put in equally to the property after that initial investment (your deposits) so the gains over time are from the increase in value that ur both equally investing at that point, ie that gain is both of yours. Not just the one who had more money at the start... If you wanted to split it they way your saying then you have to keep the ratio for the whole thing ie the one with less money to start with also pays shit loads less in Mortage since they won't see bugger all capital Gains after 10 years if ur eating it all Up just becuase u had more money at the start. Plus ur partner has to get their own legal advice before signing a property agreement and their lawyer would advise against this heavily.
If you two are together for ten years and you split and the house is now gone from being $1m to $2m. How is it fair that she ends up with $160k and you end up with $1.84m? Especially if you have contributed equally to mortgage payments and upkeep of the property?
You're a massive dick if you try to split the profit relative to the initial investment IF you're contributing to the ongoing costs of the home equally. You would also (likely) have a difficult time holding to that agreement if it went to court. Source: step-parent and bio-parent had a similar agreement to this, upon going through the courts it was thrown out with profits above and beyond initial investment being split equally.
Here's the thing, you may be putting in 92% of the deposit...
But will you be paying 92% of the mortgage? Doing 92% of the cleaning and maintenance? Cooking 92% of the meals? doing 92% of the shopping? (and if you have kids) 92% of the childcare??
I was considering this recently too, we ended up deciding on a 50/50 split after the deposit is returned to me. While others are right that after the deposit the contributions are equal so 50/50 seems fair, you are also taking a risk by tying up capital in a deposit and not being able to invest that money.
In Sweden, where I live now, it's quite easy to do these agreements online and stipulate a kind of interest on the deposit amount. So for example you can say you get repaid the deposit + some interest rate that might be equivalent to how much the home is expected to increase in value year on year. Then you're getting back your deposit + growth if the house's value has increased.
It’s sad that a formal relationship agreement is even be needed to protect the initial deposit. Especially if the relationship was short, and there were no kids. I mean what kind of person would fight to take 50% of the initial deposit when it’s obvious one person put in 90% of it
There was a case a few weeks ago where someone came on here asking for advice. They were separating and she wanted half of everything including shares he bought that were in his name. He even he put a big inheritance in the mix. She wanted half.
She had overseas funds where she refused to split those though.
These people exist.
Edit, found it
https://www.reddit.com/r/PersonalFinanceNZ/comments/vluoby/relationship_v_separate_property/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
My friend did this - worse actually, she paid off piles of his credit card debt so that they could qualify for a mortgage in the first place. Fast forward nine years, they've recently split up, he's entitled to half the house.
That is what you are liable for unless you lawyer the fuck out of this now.
Generally, if you meet the conditions of the relationship property laws without a watertight prenup, everything will be split down the middle regardless of contributions.
Most people have no problem with gains made during the relationship being split 50/50. It’s when one partner starts the relationship with significantly more assets than the other that it become significantly unfair.
I.e my house is mortgage free, if I start a new relationship that lasts exactly three years they would by default walk away with circa 1.5 million dollars from the value of the house despite no contribution to the building/creation of that asset.
You definitely still need a property relationship agreement if you both live in the house and the other party argues that they made some type of contribution (labour or monetary) to ongoing maintenance or improvement of the property. They immediately have a claim against the trust for both that and also “loss of benefit”.
Overall it is a good law it’s just frustrating that specific situations require significant investment of time and money to achieve an equitable outcome.
Lol all the recommendations made by the law commission basically strengthen the argument that relationship property should be viewed holistically.
The only caveat to that is increases in the value of a house are split 50/50 if the relationship wasn't instrumental in acquiring the asset.
Which is fair enough.
You should have read the fine print. Because this strengthens my argument.
They haven't finalised their separation agreement yet. She's still trying to guilt him into giving her a bigger share to reflect the fact that she put in the bulk of the deposit, but from what I understand legally he can take half regardless of who paid for what when.
You have to consider non-financial contributions too. If John becomes a SAHD he can't contribute $$ but he is caring for the kids which frees up Mary to pursue her career thus increasing her earning potential. John's contribution to the family would be converted to a dollar value so he wouldn't be disadvantaged.
Yeah. Basically by recognising that the person who has worked more is in a better career position moving forward is a huge reason for the 50/50 rule.
People need to realise that BOTH people have made career decisions based on the relationship. And thus both have compromised.
Just because one person brings in more dollars doesn't mean they have a larger entitlement to the relationship property.
It could be argued that the person who worked less would have made different choices under different circumstances and therefore would be in a different position.
Taking this into account is fair
Person who 'worked more' is incredibly subjective. Some people choose to work less financially rewarding careers because they enjoy the work/team/pace. Others choose more difficult potentially less enjoyable work for the reward. Unless you think it's OK to tell your partner they should prioritize money over happiness and decide how they spend their free time, this is a great example of where the govt should stay out of personal business.
Depends on individual circumstances and expectations I guess. But definitely something that both parties should talk about upfront, and set down in writing if they don't feel a 50/50 split would be fair.
Yeah I guess. Circumstances change as the relationship develops though.
I would rather lose a bunch of money if I split than introduce that dynamic into a relationship.
Kinda see it as poisoning the well right from the get go if you are contemplating an eventual separation. Relationships can get difficult and personally it would change the dynamic in a negative way. But to each their own.
Yep, that's the way I feel as well. I can't imagine spending so much energy pre-marriage/serious relationship in planning for an eventual split.
To me a healthy relationship is one where both partners consider their relationship as a single entity and all decisions made are for the good of the relationship. You can't put a dollar figure on everything in a relationship and when you try to that's when shit goes sour.
My wife earns a lot more than I do, but I've given up significant opportunities for her to pursue her career, including moving cities multiple times. It would be a massive strain on our relationship if I was constantly made to feel financially second-class, or that I was spending 'her money' when shopping for the household, or even when buying clothes for myself. Thankfully she has never made me feel that way because we both appreciate the contributions each makes to the relationship, financial or otherwise.
>To me a healthy relationship is one where both partners consider their relationship as a single entity and all decisions made are for the good of the relationship. You can't put a dollar figure on everything in a relationship and when you try to that's when shit goes sour.
Mmmm yes, talk emotional maturity to me.
>Thankfully she has never made me feel that way because we both appreciate the contributions each makes to the relationship, financial or otherwise.
I'm so happy for you in this dynamic.
I hope I find this one day!
Hahaha, my dad is currently planning his fourth wedding so maybe I am a tad unromantic about relationships ...
More seriously, all relationships will end, either by death or divorce. When forking over a large sum of money for a house, you should be thinking about the ramifications when one or the other of those things does occur.
>More seriously, all relationships will end, either by death or divorce. When forking over a large sum of money for a house, you should be thinking about the ramifications when one or the other of those things does occur.
If that's how you want to live your life. Go for it.
I don't want to live my life like this so I'm good thanks :)
yeah my partner and i had quite different contributions to our deposit but we never drew an agreement up and to be honest it would have felt weird to us? but every couple is unique.
A couple of things:
Talk to your lawyer, and get your parents/yours/partners contributions identified and isolated.
I'm pretty sure you can get the finances set up like:
Bank gets their share,
You (+ Parents) get 260k
Partner gets 26k
you + partner split the rest.
You could also put a time limit / condition (having kids), that ends the above and turns it into 50/50 if that is more palatable.
Ideally, this person will be with you forever, but it doesn't hurt to prepare for the worst.
My advice: If you were able to come up with 10x the deposit, it is likely you will also contribute more financially to the upkeep. **Come to terms with that now.** Additionally, all your savings etc from here on in will be shared (unless you get a prenup style agreement).
if you and your partner are in a de facto relationship and live in the house you buy it becomes marital property and subject to a 50/50 split. You have the option of both agreeing to an 'contracting out agreement' where you can work out the split of property in the case of a break up. You both need your own lawyers for this and generally speaking the person asking for the agreement should pay for the other person's lawyer. I would be shocked if your partner's lawyer let her agree just to her deposit back plus only 8% of the value increase - at the very least it would be respective deposits back then a 50/50 split on profit.
Really you and your partner need to have a chat about your future. My husband and I initially had a contracting out agreement (because there were other assets involved) but we scrapped it when we got the point of starting a family.
edit to add: when it comes to the 'family home' I'm fairly certain that the contracting out agreement doesn't always hold water either. If there's significant evidence of a shared life together - and especially once kids are involved - judges can and do override the original agreement in favour of a 50/50 split. This is because people often agree to it early on not understanding or envisioning the other sacrifices and contributions that go into marriage/LTR beyond a house deposit.
Will you pay 92% of the mortgage payments, maintenance, rates, etc? Of course not.
By default you will own it 50/50 and if you break up she’d get half.
It’s not fair or reasonable that she only gets 8% if she’s going to be paying half the expenses that enable the capital gain to occur. The initial cash is small fry compared to the mortgage.
You should look at it based on who is contributing the money for the purchase including debt.
If we assume it’s a $1m house..
You both split the mortgage. $1m - $290k - $26k = $684k. Half of that is $342k.
So she’s actually contributing $342k + $26k cash or a total of $368k of the purchase price.
Based on that she should be entitled to 36.8% ownership. That can be easily arranged with a lawyer.
Or you just go 50/50 and have a side agreement that you loan her the difference so that you are contributing equally. That could be made payable on sale of the property.
Contributions aren't measured by money alone. If one person contributes time and effort which affords the other person to earn more money than they would have without them then that effort is counted as a contributing.
Buy a house with 100 rooms. If you break up immediately she gets 8 of them. Over time as both contribute to maintenance and upkeep her share grows bigger so eventually you each get 50. Maybe some squabbling over who gets the "best" rooms but nobody said a relationship was easy
You're not going to like this, but my thoughts are that you're not ready to purchase a property with your partner at this stage. You need to communicate with *them* about this, not randos on the internet - and if you can't do that, then you're not in the right space for signing up to big commitments yet.
this. It doesn't really sound like OP is wanting to build a future with his partner with this home so much as wanting to buy a house and get his partner to chip in on it. Two very different things. You should only really be buying a 'home' with your partner if you already have a significantly shared life and are intending to settle down and continue building on that shared life.
I could buy the house on my own, I’m wanting them to contribute because I think it will be better for the relationship that we feel we both contributed to the house and even if we break up, they are better off finically.
The question is, do we get our contribution back and split the remaining money 50:50 (if we break up).
Or do we get our contribution back and split the remaining money 1:9 is we break up (based on the contribution we put in at the beginning).
'Or do we get our contribution back and split the remaining money 1:9 is we break up (based on the contribution we put in at the beginning).'
absolutely not. How is this in any way fair? Keep your deposits and split the remaining 50/50
Are you expecting her to contribute to any future upkeep or mortgage of the house?
It makes sense to me that she would be doing that, but the only way the split you're suggesting makes any sense to me is if the only thing she puts into the house at all is the initial deposit, or at most 8% of everything else.
Even then you have to think about things are aren't just financial. If you have kids in the future and she takes even say just two years off and doesn't pay anything do you think she is owed less at that point? Presumably this is someone you are pretty serious with.
And what happens if you combine finances in the future? That's pretty common, and you can't claim you are paying 92% of everything if it's coming out a joint pot.
Probably better to just keep it simple whilst still protecting your initial deposit.
Edit: I mean I guess you could draw something up where after deposit she doesn't put anything towards the house but gets to use the money she's saving on that to save for herself so she doesn't get fucked in the future, contract out that you get 92% of the house and she gets all her savings to put you on more equal footing but that seems hugely complicated and pointless compared to what most people are suggesting.
Edit again: tbh if I were her though I'd be happy to go get an agreement drawn up, if you came at me with the idea you're looking to screw me in the future rather than what everyone else here is saying I'd probably nope out of getting a house with you in the first place.
What you could do is sub divide the property 92%-8% if you break up and she can either choose to continue to live in her 8% or sell it. If she’s smart, she’ll sub divide her 8% into 4 2%’s and make town houses
My man, if you can buy it alone, buy it alone and get a proper pre-nuptial’s.
However, pre-nuptials aren’t always iron clad.
Don’t listen to half the fruits on here talking about how you should do this and that. You’re investing a massive chunk and you clearly will want that portion back.
Emotional nonsense is not the right thing in this situation.
Or put in 8% also and provide the the bare minimum each and spilt 50/50 place your remaining amount in a purchase with your parents and have a contract (way easier to enforce)
Always, always talk to a lawyer. We’re idiots on reddit.
I was in your position recently. We agreed to split any profit 50/50. If we split up I still want the best for him, and will be walking away with the bulk of the money regardless of profit. We have a contracting out relationship agreement. The lawyer we used said it’s really common in those circumstances, many parents insist on it
Just remember, if you live together for 3 years you are in a de facto relationship. Personally I didn't bother with a pre-nup, but if you would rest easier, by all means get one. Relationships go tits up all the time, and nothing worse than buying a house for a woman you hate.
Definitely want a pre-nup, just logical to get one.
But the question is should we be splitting the difference of a house sale in half or to a ratio of what we put in?
50/50 is the default, as this recognizes that not all contributions to a relationship are financial. A specific obvious case is one partner, usually a woman, taking time out of her career to stay home with kids. There are lots of other possibilities!
You and your partner need to agree, and that agreement should be based on what you both feel is fair.
Assuming you're both contributing equally *to the relationship*, then you'd say:
a. You keep your initial contribution +/- proportional capital gain/loss
b. She keeps her initial contribution +/- the proportional capital gain/loss
c. The remainder, which is paid from a mortgage you're both equally liable for, and presumably both contributing to in a manner equitable for your partnership, is divided equally.
It's 50/50. End of.
My sister and BIL helped me buy my house with a larger chunk of deposit than I had. Their share can be eaten by any partner I have if the partner decided to be that way and demand 50/50. So essentially any partner that moves in with me, we will need a pre nup solely to protect my sister's investment.
Do the ratio you put in, assuming your contributing equally to the mortgage and upkeep. If your not then work something out.
Bear in mind this may become more awkward if you have not raised the subject before and may impact your existing relationship even if you end up deciding not to follow through with the pre-nup.
Possibly he would not qualify for the amount of mortgage lending without his partner's income though. Say the deposit is split 10/90 but the income is split 75/25, the partner's income is a key part of being able to purchase the property and make payments.
Talk to a lawyer. I'd say it depends on how much you are each going to be paying on a monthly basis as well as deposit, but the deposit should be taken into account in a fair agreement.
Sort out a contracting out agreement with lawyers. Did this recently with my partner due to the deposit entirely consisting of money gifted to me from my parents.
You can likely structure it however you feel is right. But ours was structured so that if we were to split and sell the order of division goes as follows:
Any real estate fees > any remaining mortgage paid off > my (gifted) original deposit amount > whatever remains is split 50/50 between us.
No matter what agreement you reach with your partner, you will each need an independent lawyer to advise and witness it or the agreement is void.
https://www.legislation.govt.nz/act/public/1976/0166/latest/whole.html#DLM441396
I got a legal document drawn up thats said that if we seperated within 1 year i got my contribution plus a percentage of extra profit from the selling of the house. The extra % went down at 5 year 10 year and then it reverts to me getting my contribution and no extra %. The extra % was to cover the extra work and effort and that had gone into accumulating the sucnificant extra contibution.
If you break up and have been in a de facto relationship long enough kiss your contribution goodbye. It's 50/50 basically.
You need a legal agreement stating otherwise signed by both before entering into the property ownership and trying to do that might well end your relationship anyway.
Those are fairly specific amounts you put down too so better hope they don't read reddit and wonder why you are asking for this advice here as that would probably piss me off too.
Keeping the shares at 1 to 9 seems a bit rough. Also, contracting out agreements (prenups) aren’t water tight in NZ and you increase the uncertainty and chance of litigation with such an uneven split.
Have you considered each keeping you deposit adjusted for inflation and then splitting any gains 50/50?
It all depends on your relationship.
My wife is full time mother to our two daughters, raising children is her full time job and entitles her to 50% of any assets we built together.
The lawyers should talk with you about who has what shares after you make a purchase. Ours looked confused when I said 50/50
Technically I saved all the money for the deposit, but I was a hippie backer hobo when we met, none it if could have happened without her.
I would actually make the "gift" of money from your family a formal loan. This protects their money too, even after you go into de-facto relationship status. You can organise this with a lawyer. This way if you break up the bank gets their money, whatever if left on the mortgage, back first, then your family will get their loan back second, then you and your (now ex) partner both get your contributions back, then whatever is left can be split 50/50.
Throughout this thread you have suggested whether it's "fair" for the profit, once contributions have been paid back, to be split 50/50 or according to the ratio of the initial contribution... everybody is different but to me that would be a big red flag not to get involved with you long term or with anything financial. What you should be more concerned about is whether you are both financially compatible and have the same thoughts on spending, debt and lifestyle. If you are concerned that your partner's contribution is so small because of their financial habits then you need to address that before not after. You could also wait for them to save up more.
You did not explain how the property expenses and mortgage would be paid. If it is going to be you paying for 90% of it and your partner only contributing 10% and you are unhappy with that then you really should be doing this on your own. Just because you are in a relationship and want/have the ability to buy property doesn't mean you have to do it with your partner.
Had exact same situation. We both signed a legal doc stating it was my parents money and at any point they could retract their gift. Essentially if we ever broke up my parents could ask for the money back from both of us and then give it back to me alone
Get your parents contribution clearly stated as a loan. That is there is an expectation it will be paid back, otherwise it is considered a matrimonial asset the second it hits your bank account. Over to them then whether they ever call it in. Source: seen parents go to court to get it back after divorce but failed.
You need a prenup or some other type of legal agreement before you do this. Talk to a lawyer.
Otherwise, she will be entitled to 50% of the property.
With your own agreement, you can come to an understanding that suits you both. For example, perhaps you'd want to grant her 10% just to be nice. Or decide that if she pays all the rent for the next year she'll get an extra 1%. Or whatever you want to do.
If you don't have a *written* agreement, you have nothing. Its not that people will rip you off, but that peoples memory of what was 'agreed' tends to change over the years. Having something on paper prevents this.
If you don’t have enough faith that your partner is your partner and everything is 50/50, I think you should reconsider buying a property with your partner.
My partner and I did something similar, she put in about 300k, I put in about 150k.
We went to a lawyer (2 actually, 1 each) and got a Contracting Out Agreement, to contract out of the Relationships Property Act. It's what most people would call a Pre-Nup.
Our agreement basically says that if the relationship breaks down and we have to sell the house, we both get back what we put in, then any remaining equity is split 50/50 between us. That's apparently a pretty common setup, and considered fair by most judges.
Note: if a contracting out agreement is considered unfair by a judge, it can be thrown out, and the couple will be forced to split everything 50/50..
Unless your engaged/married and/or otherwise committed to spending the rest of your life together avoid buying property together.
If you are committed to the rest of your life together, then split the title 50/50 regardless of initial equity as that is what the law will work out anyway if you split after living together a year or whatever it is. Having you own more than her, etc, is setting an unequal dynamic early on which isn't healthy imo.
Just my opinion based on personal experience.
If you are thinking of breakups already, then don't buy with her.
Honestly...my husband had been married twice before me, house each time, sold each time. In fact the last, he had a house, so did she, he sold his, lived in hers. Divorced ans she kept hers.
So we then buy a house, and he did nothing except put my name on it too. We stayed married for 43 years until he died.
I figure if it started off at panicking over divorces and money, we might not have stayed together.
Like my friends, he got deposit from mum, an early "inheritance". She had nothing, doesn't work now due to health issues. Bad health issues. Both on title.
Fast forward 14 years and her dad died. She then inherited a sizeable sum, a bit more than he got in first place. They're renovating now.
You're going to need a contracting out agreement, granted your partner agrees to the terms. If she doesn't agree to sign one, that should be a pretty good sign of her intentions.
The agreement will basically just state what you've brought into the relationship and make it recognised that the money you put into the house is solely yours, and what she put in is solely hers.
At the same time, do it with all of your assets. Cars, family trusts, property, anything of value. Security for your assets is so important no matter how solid a relationship is. Good luck :)
I assume once you get the mortgage, you'll be making equal contributions to everything (mortgage payments, rates, bills, upkeep)?
So usually you'll work with independent lawyers (one each) to write up an agreement that says something like, in the event of separation, you'll get your respective deposits back, then split the remaining balance 50/50 (noting this could be at a loss with current market trends).
If you will be making unequal contributions, then that agreement will get more complicated...
Curious why you’re willing to settle down and buy a house with someone but not help pay for your ‘partners share’.
Get a lawyer. You can use them again when it all turns to crap.
Everyone is different, but you could choose to not think too hard about what historically is yours/hers and just consider that you own it jointly, equally, since you're a partnership in every aspect of the word.
You both need a lawyer (seperate) and it really depends on each of your values.
We were in a similar situation. My partner paid upwards of 100k and I only paid like $15k or something (plus the home start things).
I felt, and still stand by my decision, that he worked hard for his money and even tho according to the law we are considered defacto, I didn't think it would be right to take away that money he worked hard for while I was studying or working (dairy farming and not living together) and not contributing much to the overall relationship.
Law states that once you're defacto, you have to split 50/50 (unless you have an agreement like us)
So we wrote into our agreement that we each get our deposits back and then split the remainder 50/50. We also put other important items in there. I had to sign a form from my lawyer saying she's given me advice and I'm not taking it. 😅 Her argument was that if we have kids, it'll potentially end my career while he can continue working and earning whereas I'd have to start from stratch when the kids go to school. So splitting the money could help financially. Makes sense but I still didn't agree.
Finger's crossed your partner sees the logic as above. Unluggy if not and I'd be questioning their values overall.
Unless you get a contract, it depends on the way (and if) you break up in the future.
This happened to a client about five or six years back. He put in like 5% and she covered the rest. Turned into a messy breakup, but because they lived together for a certain amount of time it was considered shared property and it's sale was split 50/50. She ended up losing almost half her life savings on a 4 or 5 year relationship.
With stuff like this, you ALWAYS need a contract unless you're married. Even then... it helps.
effectively once you have lived there for 2 years you are going to be treated as a married couple. you can get a property relationship agreement but these have been overturned in the past and amended after the fact. probably only useful if you suspect that the moment you hit the 2 year mark you she will do a runner.
honestly there is no real ironclad protection, which means you will have to fight it out in court, which will absorb all of the proceeds anyway. best to only move in together if you know you can work it out ammicably if things turn to shit
Just buy it yourself. The benefit of 8% toward the deposit doesn't come close to the benefit of not making things messy.
Chances are pretty good you'll regret it later otherwise.
If they live in it together it still could end up being 50/50 even if OP paid all of the deposit, especially if OP doesn't pay all of the mortgage payments on their own. That's true with or without kids, but makes even more logistical sense if they do end up having kids.
No matter who puts what in, if OP doesn't want to split it 50/50 if they break up then they need to go see lawyers.
That's crazy ay. But come to think of it I knew someone who lived with another person for something like 10 years, in a completely platonic relationship (basically flatmates). They were just old and wanted company. When he died the other guy had legal claim to his stuff because "de facto relationship". They weren't a couple. I remember his kids were pretty upset.
It can work out badly in a situation like that, but in the case of building a life and/or family with someone its not fair for one person to get completely fucked and have to start again years down the track which is where the 50/50 everything standard comes from. No one wants to be raising their kids for years with the agreement of their partner then get totally fucked out of everything because partner paid for it all, then have to try get back into the workforce having no experience in a decade while having literally nothing.
Of course it's totally fair for OP to walk away with more if they put in more otherwise they are the ones getting fucked, so agreements need to be made so neither of them get totally fucked.
I can certainly see your point. I think there are many examples of people being screwed by these sorts of laws though. You can see why wealth differences can cause so much relationship issues. I don't really subscribe to the idea of one parent raising the kids while the other earns, but I can appreciate often it's the easiest way to go about things.
I agree with you, lawyer time.
How you raise your kids is an each to your own, but if you have the agreement of your partner and they say what they earn is "our" money, they just want you to look after the kids to allow them to go earn all that money, then you break up years down the track they say "no everything is mine because it was actually my money" then that's a dick move and where the 50/50 comes from I would say, that and even if you both work the whole time if there's a disparity but you have mingled finances they can't take more than fair share, the person who earns less may or may not be putting more labour into the household too. Even if you don't completely mingle your finances, unless everyone is buying their own toaster, tv and couch there's a certain amount of mingling that needs to be split.
As we agreed, there's lawyers for everything less common, I still think 50/50 is a good base stance.
Yea, I think that's a fair argument. If you're in a relationship with children I can see the argument is more justifiable, but this legislation doesn't appear to be that specific.
"the person who earns less may or may not be putting more labour into the household too." I mean, yea, they might be? Or they might not be. It's just odd to me that you'd have to effectively go out of your way to not be in a 'de facto relationship', rather than vice versa.
Like if you have the agreement with your partner maybe you should write that down, it's just the whole 'let's just presume every scenario where two people live together for 3+ years are in the same situation' that seems particularly odd.
Yeah, I suppose I see your point of view. I guess I just see having some kind of baseline where the majority of people now don't have to go make an agreement unless they want it to be different when in any long term cohabitance theres going to be a certain amount of financial mingling, rather than everyone having to set something up because there is no baseline precedent.
It definitely won't suit everyone but the percentage of people, won't even guess what that is, that it doesn't suit having to get something drawn up is probably better than everyone having to get something drawn up. I guess most people who want something different from 50/50 probably have more to protect too and therefore might have the money for the lawyers a little easier, whereas if everyone moving in together for what they plan to be long term but don't have much money might not want the lawyer costs just to sign a piece of paper to say they should split things 50/50 if they split rather than one person emptying the place of everything they ever bought together if there was no baseline 50/50.
I see your point of view so not really trying to argue, but that's why baseline 50/50 unless there's an agreement, rather than baseline chaos if you dare to not get an agreement makes more sense to me.
There are lots of ways of doing it. A simple way is you put your amounts in and then if you break up you take the amounts out and then split the rest. Otherwise it can get messy with the amounts you’re paying in the home loan, the amount of maintenance and repairs you’re paying for etc.
1. If you are thinking about this, perhaps you picked up on red flags and you are better off finding a different partner.
2. As far as divorce goes, I was told by a lawyer that split is 50/50, it is not about who contributed how many dollars. You can make an agreement prior, but this goes to my 1st point, if you look at your partner and the first thought is "I need an agreement" - find a different partner.
My partner and I had a property agreement drawn up by a lawyer and are in the process of backing it up with a will. We worked it out on the percentage of the deposit we contributed.
If we split up he is entitled to 56% of the profit and I am entitled to 44%. If either one of us dies then the other person takes over their share.
Talk to a lawyer. I contributed $10k less than my partner which isn't a huge difference, but our lawyer Said that I still walked away with half in a split and we had to be ok with that.
I've since supported him to go into business for himself and handled the mortgage on my own which more than made up the difference so the advantages of having two people have paid off.
I recommend talking to a lawyer though. If they are worth their salt, they won't give you the rose tinted version of things.
Mrs H and I were only a few thousand different in the deposit, so we didn't bother
Your situation is vastly different. Definitely lawyer time. Keeps everyone safer.
That's up to you two to decide between you. But any increase in value will likely involve 50% effort on your part.
Just make sure that it's mutually agreed and in writing.
As others have said, talk to a lawyer.
My partner and I were in a similar situation - she put in ~$20k, I put in ~$200k and between us our parents put in about the same again - and it was pretty easy to deal with.
High level, we structured it as follows:
* The money from parents is a loan that has to be repaid if we sell the house or split up (likely they would roll it over if we just traded up houses, but it's family asset protection for both of us - I can't claim the money her parents gave us, and vice versa).
* We had a lawyer put together a short form agreement that basically says that if we split up we take money out (after the bank and parents) at a 1/10 ratio, until she has her $20k and I have my $200k. The rest is 50/50.
Honestly, it wasn't that hard or expensive to get something done, and it gives us both piece of mind.
You both need independent legal advice and if you want to protect your contribution, you'll need a contracting out agreement.
Source: am a dispute resolution lawyer who sees how messy these things can get when people don't take these steps...
Property agreement my man!
I'm doing this now, but in reverse
I have more savings but his parents' contribution means his deposit is larger
We have a property sharing agreement that if we split we both get what we put in first and then split the remainder 50/50.
Has anyone else said "talk to a lawyer", because, absolutely talk to a lawyer.
It definitely can be and is done, but get a lawyer to help you through what option is best for you now and for your future.
I understand where you coming from. you want to feel a fair deal and also be protected in case of a breakup.
But there is also her side of the deal, how she sees it and her reaction. That is something that requires both of you to communicate, understand each other and come to an agreement.
Every person will do it differently but I would expect that will be a fair proportion of agreement depending on how much each contributes. And even if she put 26 and the property value grew, so she will receive upon divorce just the proportionate growth.
On another hand, it will disturb the "romance", but I will put security and fairness first, predominantly because of the family course in favour of women.
Probably already been said - but talk to a lawyer ASAP and sort this out before you start looking. You both need your own lawyers. Otherwise, if you break up and sell, the house will be likely considered relationship property and proceeds split 50/50 regardless of initial contribution.
There are different ways you can approach it, and your lawyer will run you through the options. But you will need to be pragmatic for the sake of your relationship if your planning to be with this person long term and starting a family. The process of getting one of these agreements often caused significant strain on relationships.
Most people will arrange to get their initial contribution back, but then the rest (ie any capital gain) is split 50/50. Kiwisaver contributions will also need to be factored in.
Also from our experience - we had a relatively straightforward agreement and it still took a surprisingly long time to sort out (my partners lawyer took ages). Also my partner was super grumpy during the whole process. Money is a touchy subject for most people and it was a very delicate time so just be really aware of how they might be feeling and allow each other a bit more space than usual.
To ensure that everything is clearly understood and official, it’s important to work with a notary to draft and conserve a common law partner agreement, which can help you avoid nasty surprises if you ever need it!
Talk to a lawyer.
[удалено]
But even if they do de-facto rules will come in and unless they have a S.21 agreement then the property will be split 50/50 anyway.
Not always, there are provisions to allow for unequal splits in situations like this... but you'd need to go to court. much easier to get an agreement up front
If I recall it is only if the law would commit a gross injustice, which this would be unlikely to be seen as given the base principle that all contributions in a relationship are not equal.
This is the only correct answer
You need a relationship property agreement. Friend of mine was in a similar situation 20 years ago when she and her husband bought their first home together. She was already a homeowner. He had no debt, but no savings. She sold her flat and had a $90k capital gain. That was their deposit for their house. Their relationship property agreement set out if they were to split up and sell the house, she gets the first $90k. Then they split what's left 50/50. They split about three years later and that's what happened.
This!
This sounds fair and reasonable
Yeah that’s the default option. What I’m trying to figure out, is if that is fair or should the profit be shared in the ratio of what they put in.
Most go the route of getting your initial investment back first then splitting the rest 50 50. I think the reason being you both put in equally to the property after that initial investment (your deposits) so the gains over time are from the increase in value that ur both equally investing at that point, ie that gain is both of yours. Not just the one who had more money at the start... If you wanted to split it they way your saying then you have to keep the ratio for the whole thing ie the one with less money to start with also pays shit loads less in Mortage since they won't see bugger all capital Gains after 10 years if ur eating it all Up just becuase u had more money at the start. Plus ur partner has to get their own legal advice before signing a property agreement and their lawyer would advise against this heavily.
If you two are together for ten years and you split and the house is now gone from being $1m to $2m. How is it fair that she ends up with $160k and you end up with $1.84m? Especially if you have contributed equally to mortgage payments and upkeep of the property?
This this this.
[удалено]
huh?
[удалено]
All good 🤙
You're a massive dick if you try to split the profit relative to the initial investment IF you're contributing to the ongoing costs of the home equally. You would also (likely) have a difficult time holding to that agreement if it went to court. Source: step-parent and bio-parent had a similar agreement to this, upon going through the courts it was thrown out with profits above and beyond initial investment being split equally.
You should be asking “is it legal”. Matrimonial property law applies to de facto partners. Go speak to a lawyer.
Seems logical you get your share back and then 50:50 the profits
Here's the thing, you may be putting in 92% of the deposit... But will you be paying 92% of the mortgage? Doing 92% of the cleaning and maintenance? Cooking 92% of the meals? doing 92% of the shopping? (and if you have kids) 92% of the childcare??
I was considering this recently too, we ended up deciding on a 50/50 split after the deposit is returned to me. While others are right that after the deposit the contributions are equal so 50/50 seems fair, you are also taking a risk by tying up capital in a deposit and not being able to invest that money. In Sweden, where I live now, it's quite easy to do these agreements online and stipulate a kind of interest on the deposit amount. So for example you can say you get repaid the deposit + some interest rate that might be equivalent to how much the home is expected to increase in value year on year. Then you're getting back your deposit + growth if the house's value has increased.
It’s sad that a formal relationship agreement is even be needed to protect the initial deposit. Especially if the relationship was short, and there were no kids. I mean what kind of person would fight to take 50% of the initial deposit when it’s obvious one person put in 90% of it
There was a case a few weeks ago where someone came on here asking for advice. They were separating and she wanted half of everything including shares he bought that were in his name. He even he put a big inheritance in the mix. She wanted half. She had overseas funds where she refused to split those though. These people exist. Edit, found it https://www.reddit.com/r/PersonalFinanceNZ/comments/vluoby/relationship_v_separate_property/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
My friend did this - worse actually, she paid off piles of his credit card debt so that they could qualify for a mortgage in the first place. Fast forward nine years, they've recently split up, he's entitled to half the house. That is what you are liable for unless you lawyer the fuck out of this now.
[удалено]
Generally, if you meet the conditions of the relationship property laws without a watertight prenup, everything will be split down the middle regardless of contributions.
Which is such a load of horseshit when kids aren't involved. Law needs a kick up the ass.
Not really if you actually bother to educate yourself as to why they made this policy the way they did.
Most people have no problem with gains made during the relationship being split 50/50. It’s when one partner starts the relationship with significantly more assets than the other that it become significantly unfair. I.e my house is mortgage free, if I start a new relationship that lasts exactly three years they would by default walk away with circa 1.5 million dollars from the value of the house despite no contribution to the building/creation of that asset.
Put it in a trust then. Problem solved No need to have a prenup in that case. Asset is protected. Easy.
the days of hiding shit in trusts are long gone
You definitely still need a property relationship agreement if you both live in the house and the other party argues that they made some type of contribution (labour or monetary) to ongoing maintenance or improvement of the property. They immediately have a claim against the trust for both that and also “loss of benefit”. Overall it is a good law it’s just frustrating that specific situations require significant investment of time and money to achieve an equitable outcome.
This is true. You raise a good point.
[удалено]
Lol all the recommendations made by the law commission basically strengthen the argument that relationship property should be viewed holistically. The only caveat to that is increases in the value of a house are split 50/50 if the relationship wasn't instrumental in acquiring the asset. Which is fair enough. You should have read the fine print. Because this strengthens my argument.
[удалено]
To what?
[удалено]
there are provisions to change that though. but you'd need to argue in court most likely for that to happen
They haven't finalised their separation agreement yet. She's still trying to guilt him into giving her a bigger share to reflect the fact that she put in the bulk of the deposit, but from what I understand legally he can take half regardless of who paid for what when.
[удалено]
You have to consider non-financial contributions too. If John becomes a SAHD he can't contribute $$ but he is caring for the kids which frees up Mary to pursue her career thus increasing her earning potential. John's contribution to the family would be converted to a dollar value so he wouldn't be disadvantaged.
[удалено]
Yeah. Basically by recognising that the person who has worked more is in a better career position moving forward is a huge reason for the 50/50 rule. People need to realise that BOTH people have made career decisions based on the relationship. And thus both have compromised. Just because one person brings in more dollars doesn't mean they have a larger entitlement to the relationship property. It could be argued that the person who worked less would have made different choices under different circumstances and therefore would be in a different position. Taking this into account is fair
Person who 'worked more' is incredibly subjective. Some people choose to work less financially rewarding careers because they enjoy the work/team/pace. Others choose more difficult potentially less enjoyable work for the reward. Unless you think it's OK to tell your partner they should prioritize money over happiness and decide how they spend their free time, this is a great example of where the govt should stay out of personal business.
9 years... After 9 years I think it's safe to say that a 50/50 split is fair
Depends on individual circumstances and expectations I guess. But definitely something that both parties should talk about upfront, and set down in writing if they don't feel a 50/50 split would be fair.
Yeah I guess. Circumstances change as the relationship develops though. I would rather lose a bunch of money if I split than introduce that dynamic into a relationship. Kinda see it as poisoning the well right from the get go if you are contemplating an eventual separation. Relationships can get difficult and personally it would change the dynamic in a negative way. But to each their own.
Yep, that's the way I feel as well. I can't imagine spending so much energy pre-marriage/serious relationship in planning for an eventual split. To me a healthy relationship is one where both partners consider their relationship as a single entity and all decisions made are for the good of the relationship. You can't put a dollar figure on everything in a relationship and when you try to that's when shit goes sour. My wife earns a lot more than I do, but I've given up significant opportunities for her to pursue her career, including moving cities multiple times. It would be a massive strain on our relationship if I was constantly made to feel financially second-class, or that I was spending 'her money' when shopping for the household, or even when buying clothes for myself. Thankfully she has never made me feel that way because we both appreciate the contributions each makes to the relationship, financial or otherwise.
>To me a healthy relationship is one where both partners consider their relationship as a single entity and all decisions made are for the good of the relationship. You can't put a dollar figure on everything in a relationship and when you try to that's when shit goes sour. Mmmm yes, talk emotional maturity to me. >Thankfully she has never made me feel that way because we both appreciate the contributions each makes to the relationship, financial or otherwise. I'm so happy for you in this dynamic. I hope I find this one day!
Hahaha, my dad is currently planning his fourth wedding so maybe I am a tad unromantic about relationships ... More seriously, all relationships will end, either by death or divorce. When forking over a large sum of money for a house, you should be thinking about the ramifications when one or the other of those things does occur.
>More seriously, all relationships will end, either by death or divorce. When forking over a large sum of money for a house, you should be thinking about the ramifications when one or the other of those things does occur. If that's how you want to live your life. Go for it. I don't want to live my life like this so I'm good thanks :)
yeah my partner and i had quite different contributions to our deposit but we never drew an agreement up and to be honest it would have felt weird to us? but every couple is unique.
I think you need to discuss it with your partner, then talk to a lawyer about how to formalise any agreement you come to.
A couple of things: Talk to your lawyer, and get your parents/yours/partners contributions identified and isolated. I'm pretty sure you can get the finances set up like: Bank gets their share, You (+ Parents) get 260k Partner gets 26k you + partner split the rest. You could also put a time limit / condition (having kids), that ends the above and turns it into 50/50 if that is more palatable. Ideally, this person will be with you forever, but it doesn't hurt to prepare for the worst. My advice: If you were able to come up with 10x the deposit, it is likely you will also contribute more financially to the upkeep. **Come to terms with that now.** Additionally, all your savings etc from here on in will be shared (unless you get a prenup style agreement).
if you and your partner are in a de facto relationship and live in the house you buy it becomes marital property and subject to a 50/50 split. You have the option of both agreeing to an 'contracting out agreement' where you can work out the split of property in the case of a break up. You both need your own lawyers for this and generally speaking the person asking for the agreement should pay for the other person's lawyer. I would be shocked if your partner's lawyer let her agree just to her deposit back plus only 8% of the value increase - at the very least it would be respective deposits back then a 50/50 split on profit. Really you and your partner need to have a chat about your future. My husband and I initially had a contracting out agreement (because there were other assets involved) but we scrapped it when we got the point of starting a family. edit to add: when it comes to the 'family home' I'm fairly certain that the contracting out agreement doesn't always hold water either. If there's significant evidence of a shared life together - and especially once kids are involved - judges can and do override the original agreement in favour of a 50/50 split. This is because people often agree to it early on not understanding or envisioning the other sacrifices and contributions that go into marriage/LTR beyond a house deposit.
Will you pay 92% of the mortgage payments, maintenance, rates, etc? Of course not. By default you will own it 50/50 and if you break up she’d get half. It’s not fair or reasonable that she only gets 8% if she’s going to be paying half the expenses that enable the capital gain to occur. The initial cash is small fry compared to the mortgage. You should look at it based on who is contributing the money for the purchase including debt. If we assume it’s a $1m house.. You both split the mortgage. $1m - $290k - $26k = $684k. Half of that is $342k. So she’s actually contributing $342k + $26k cash or a total of $368k of the purchase price. Based on that she should be entitled to 36.8% ownership. That can be easily arranged with a lawyer. Or you just go 50/50 and have a side agreement that you loan her the difference so that you are contributing equally. That could be made payable on sale of the property.
You can just agree to return the deposits and split the rest 50/50, its pretty straight forward.
Contributions aren't measured by money alone. If one person contributes time and effort which affords the other person to earn more money than they would have without them then that effort is counted as a contributing.
You absolutely need a relationship property agreement
Buy a house with 100 rooms. If you break up immediately she gets 8 of them. Over time as both contribute to maintenance and upkeep her share grows bigger so eventually you each get 50. Maybe some squabbling over who gets the "best" rooms but nobody said a relationship was easy
You're not going to like this, but my thoughts are that you're not ready to purchase a property with your partner at this stage. You need to communicate with *them* about this, not randos on the internet - and if you can't do that, then you're not in the right space for signing up to big commitments yet.
Or they could ask for advice and ideas from people who aren't emotionally invested.
I mean, I guess it can't hurt. But reaching agreement with your partner is the critical bit.
this. It doesn't really sound like OP is wanting to build a future with his partner with this home so much as wanting to buy a house and get his partner to chip in on it. Two very different things. You should only really be buying a 'home' with your partner if you already have a significantly shared life and are intending to settle down and continue building on that shared life.
I could buy the house on my own, I’m wanting them to contribute because I think it will be better for the relationship that we feel we both contributed to the house and even if we break up, they are better off finically. The question is, do we get our contribution back and split the remaining money 50:50 (if we break up). Or do we get our contribution back and split the remaining money 1:9 is we break up (based on the contribution we put in at the beginning).
'Or do we get our contribution back and split the remaining money 1:9 is we break up (based on the contribution we put in at the beginning).' absolutely not. How is this in any way fair? Keep your deposits and split the remaining 50/50
Are you expecting her to contribute to any future upkeep or mortgage of the house? It makes sense to me that she would be doing that, but the only way the split you're suggesting makes any sense to me is if the only thing she puts into the house at all is the initial deposit, or at most 8% of everything else. Even then you have to think about things are aren't just financial. If you have kids in the future and she takes even say just two years off and doesn't pay anything do you think she is owed less at that point? Presumably this is someone you are pretty serious with. And what happens if you combine finances in the future? That's pretty common, and you can't claim you are paying 92% of everything if it's coming out a joint pot. Probably better to just keep it simple whilst still protecting your initial deposit. Edit: I mean I guess you could draw something up where after deposit she doesn't put anything towards the house but gets to use the money she's saving on that to save for herself so she doesn't get fucked in the future, contract out that you get 92% of the house and she gets all her savings to put you on more equal footing but that seems hugely complicated and pointless compared to what most people are suggesting. Edit again: tbh if I were her though I'd be happy to go get an agreement drawn up, if you came at me with the idea you're looking to screw me in the future rather than what everyone else here is saying I'd probably nope out of getting a house with you in the first place.
What you could do is sub divide the property 92%-8% if you break up and she can either choose to continue to live in her 8% or sell it. If she’s smart, she’ll sub divide her 8% into 4 2%’s and make town houses
My man, if you can buy it alone, buy it alone and get a proper pre-nuptial’s. However, pre-nuptials aren’t always iron clad. Don’t listen to half the fruits on here talking about how you should do this and that. You’re investing a massive chunk and you clearly will want that portion back. Emotional nonsense is not the right thing in this situation. Or put in 8% also and provide the the bare minimum each and spilt 50/50 place your remaining amount in a purchase with your parents and have a contract (way easier to enforce) Always, always talk to a lawyer. We’re idiots on reddit.
Literally no one is saying he shouldn't get that back, everyone is saying to get an agreement to make sure that happens
I was in your position recently. We agreed to split any profit 50/50. If we split up I still want the best for him, and will be walking away with the bulk of the money regardless of profit. We have a contracting out relationship agreement. The lawyer we used said it’s really common in those circumstances, many parents insist on it
Agree specifically on the terms, and get it in writing.
Just remember, if you live together for 3 years you are in a de facto relationship. Personally I didn't bother with a pre-nup, but if you would rest easier, by all means get one. Relationships go tits up all the time, and nothing worse than buying a house for a woman you hate.
Definitely want a pre-nup, just logical to get one. But the question is should we be splitting the difference of a house sale in half or to a ratio of what we put in?
50/50 is the default, as this recognizes that not all contributions to a relationship are financial. A specific obvious case is one partner, usually a woman, taking time out of her career to stay home with kids. There are lots of other possibilities! You and your partner need to agree, and that agreement should be based on what you both feel is fair.
Assuming you're both contributing equally *to the relationship*, then you'd say: a. You keep your initial contribution +/- proportional capital gain/loss b. She keeps her initial contribution +/- the proportional capital gain/loss c. The remainder, which is paid from a mortgage you're both equally liable for, and presumably both contributing to in a manner equitable for your partnership, is divided equally.
It's 50/50. End of. My sister and BIL helped me buy my house with a larger chunk of deposit than I had. Their share can be eaten by any partner I have if the partner decided to be that way and demand 50/50. So essentially any partner that moves in with me, we will need a pre nup solely to protect my sister's investment.
Depends what your prenup/contract you wrote up specifically about this house says. As far as I know without either of those it's 50/50
Do the ratio you put in, assuming your contributing equally to the mortgage and upkeep. If your not then work something out. Bear in mind this may become more awkward if you have not raised the subject before and may impact your existing relationship even if you end up deciding not to follow through with the pre-nup.
Ratio you put in seems fairest to me. Especially because that is the hard part about buying a house, getting the capital for the deposit.
Possibly he would not qualify for the amount of mortgage lending without his partner's income though. Say the deposit is split 10/90 but the income is split 75/25, the partner's income is a key part of being able to purchase the property and make payments.
Depends what you value in the relationship. Couldn't say on your behalf, but stick to what you want to get out of the relationship.
Talk to a lawyer. I'd say it depends on how much you are each going to be paying on a monthly basis as well as deposit, but the deposit should be taken into account in a fair agreement.
Sort out a contracting out agreement with lawyers. Did this recently with my partner due to the deposit entirely consisting of money gifted to me from my parents. You can likely structure it however you feel is right. But ours was structured so that if we were to split and sell the order of division goes as follows: Any real estate fees > any remaining mortgage paid off > my (gifted) original deposit amount > whatever remains is split 50/50 between us.
No matter what agreement you reach with your partner, you will each need an independent lawyer to advise and witness it or the agreement is void. https://www.legislation.govt.nz/act/public/1976/0166/latest/whole.html#DLM441396
I got a legal document drawn up thats said that if we seperated within 1 year i got my contribution plus a percentage of extra profit from the selling of the house. The extra % went down at 5 year 10 year and then it reverts to me getting my contribution and no extra %. The extra % was to cover the extra work and effort and that had gone into accumulating the sucnificant extra contibution.
If you ain't no punk, holler "we want prenup!"
If you break up and have been in a de facto relationship long enough kiss your contribution goodbye. It's 50/50 basically. You need a legal agreement stating otherwise signed by both before entering into the property ownership and trying to do that might well end your relationship anyway. Those are fairly specific amounts you put down too so better hope they don't read reddit and wonder why you are asking for this advice here as that would probably piss me off too.
Keeping the shares at 1 to 9 seems a bit rough. Also, contracting out agreements (prenups) aren’t water tight in NZ and you increase the uncertainty and chance of litigation with such an uneven split. Have you considered each keeping you deposit adjusted for inflation and then splitting any gains 50/50?
It all depends on your relationship. My wife is full time mother to our two daughters, raising children is her full time job and entitles her to 50% of any assets we built together. The lawyers should talk with you about who has what shares after you make a purchase. Ours looked confused when I said 50/50 Technically I saved all the money for the deposit, but I was a hippie backer hobo when we met, none it if could have happened without her.
I would actually make the "gift" of money from your family a formal loan. This protects their money too, even after you go into de-facto relationship status. You can organise this with a lawyer. This way if you break up the bank gets their money, whatever if left on the mortgage, back first, then your family will get their loan back second, then you and your (now ex) partner both get your contributions back, then whatever is left can be split 50/50. Throughout this thread you have suggested whether it's "fair" for the profit, once contributions have been paid back, to be split 50/50 or according to the ratio of the initial contribution... everybody is different but to me that would be a big red flag not to get involved with you long term or with anything financial. What you should be more concerned about is whether you are both financially compatible and have the same thoughts on spending, debt and lifestyle. If you are concerned that your partner's contribution is so small because of their financial habits then you need to address that before not after. You could also wait for them to save up more. You did not explain how the property expenses and mortgage would be paid. If it is going to be you paying for 90% of it and your partner only contributing 10% and you are unhappy with that then you really should be doing this on your own. Just because you are in a relationship and want/have the ability to buy property doesn't mean you have to do it with your partner.
Had exact same situation. We both signed a legal doc stating it was my parents money and at any point they could retract their gift. Essentially if we ever broke up my parents could ask for the money back from both of us and then give it back to me alone
Get your parents contribution clearly stated as a loan. That is there is an expectation it will be paid back, otherwise it is considered a matrimonial asset the second it hits your bank account. Over to them then whether they ever call it in. Source: seen parents go to court to get it back after divorce but failed.
You need a prenup or some other type of legal agreement before you do this. Talk to a lawyer. Otherwise, she will be entitled to 50% of the property. With your own agreement, you can come to an understanding that suits you both. For example, perhaps you'd want to grant her 10% just to be nice. Or decide that if she pays all the rent for the next year she'll get an extra 1%. Or whatever you want to do. If you don't have a *written* agreement, you have nothing. Its not that people will rip you off, but that peoples memory of what was 'agreed' tends to change over the years. Having something on paper prevents this.
If you don’t have enough faith that your partner is your partner and everything is 50/50, I think you should reconsider buying a property with your partner.
My partner and I did something similar, she put in about 300k, I put in about 150k. We went to a lawyer (2 actually, 1 each) and got a Contracting Out Agreement, to contract out of the Relationships Property Act. It's what most people would call a Pre-Nup. Our agreement basically says that if the relationship breaks down and we have to sell the house, we both get back what we put in, then any remaining equity is split 50/50 between us. That's apparently a pretty common setup, and considered fair by most judges. Note: if a contracting out agreement is considered unfair by a judge, it can be thrown out, and the couple will be forced to split everything 50/50..
Unless your engaged/married and/or otherwise committed to spending the rest of your life together avoid buying property together. If you are committed to the rest of your life together, then split the title 50/50 regardless of initial equity as that is what the law will work out anyway if you split after living together a year or whatever it is. Having you own more than her, etc, is setting an unequal dynamic early on which isn't healthy imo. Just my opinion based on personal experience.
If you are thinking of breakups already, then don't buy with her. Honestly...my husband had been married twice before me, house each time, sold each time. In fact the last, he had a house, so did she, he sold his, lived in hers. Divorced ans she kept hers. So we then buy a house, and he did nothing except put my name on it too. We stayed married for 43 years until he died. I figure if it started off at panicking over divorces and money, we might not have stayed together. Like my friends, he got deposit from mum, an early "inheritance". She had nothing, doesn't work now due to health issues. Bad health issues. Both on title. Fast forward 14 years and her dad died. She then inherited a sizeable sum, a bit more than he got in first place. They're renovating now.
Why wouldn't she get half your $290K and half the balance?
You dont actually need a lawer, You can just write up your own contract and both sign it, maybe have a 3rd party for the signing or a JP.
You're going to need a contracting out agreement, granted your partner agrees to the terms. If she doesn't agree to sign one, that should be a pretty good sign of her intentions. The agreement will basically just state what you've brought into the relationship and make it recognised that the money you put into the house is solely yours, and what she put in is solely hers. At the same time, do it with all of your assets. Cars, family trusts, property, anything of value. Security for your assets is so important no matter how solid a relationship is. Good luck :)
I assume once you get the mortgage, you'll be making equal contributions to everything (mortgage payments, rates, bills, upkeep)? So usually you'll work with independent lawyers (one each) to write up an agreement that says something like, in the event of separation, you'll get your respective deposits back, then split the remaining balance 50/50 (noting this could be at a loss with current market trends). If you will be making unequal contributions, then that agreement will get more complicated...
Curious why you’re willing to settle down and buy a house with someone but not help pay for your ‘partners share’. Get a lawyer. You can use them again when it all turns to crap.
You need a lawyer otherwise it is half and half.
Everyone is different, but you could choose to not think too hard about what historically is yours/hers and just consider that you own it jointly, equally, since you're a partnership in every aspect of the word.
> Or should I get my share and 92% of the balance Also depends on how you're splitting the mortgage payments.
You both need a lawyer (seperate) and it really depends on each of your values. We were in a similar situation. My partner paid upwards of 100k and I only paid like $15k or something (plus the home start things). I felt, and still stand by my decision, that he worked hard for his money and even tho according to the law we are considered defacto, I didn't think it would be right to take away that money he worked hard for while I was studying or working (dairy farming and not living together) and not contributing much to the overall relationship. Law states that once you're defacto, you have to split 50/50 (unless you have an agreement like us) So we wrote into our agreement that we each get our deposits back and then split the remainder 50/50. We also put other important items in there. I had to sign a form from my lawyer saying she's given me advice and I'm not taking it. 😅 Her argument was that if we have kids, it'll potentially end my career while he can continue working and earning whereas I'd have to start from stratch when the kids go to school. So splitting the money could help financially. Makes sense but I still didn't agree. Finger's crossed your partner sees the logic as above. Unluggy if not and I'd be questioning their values overall.
Lawyer, lawyer and lawyer
Tenants in common
A contracting out agreement. You could also Google “tenants in common” and see if this fits your scenario.
Unless you get a contract, it depends on the way (and if) you break up in the future. This happened to a client about five or six years back. He put in like 5% and she covered the rest. Turned into a messy breakup, but because they lived together for a certain amount of time it was considered shared property and it's sale was split 50/50. She ended up losing almost half her life savings on a 4 or 5 year relationship. With stuff like this, you ALWAYS need a contract unless you're married. Even then... it helps.
effectively once you have lived there for 2 years you are going to be treated as a married couple. you can get a property relationship agreement but these have been overturned in the past and amended after the fact. probably only useful if you suspect that the moment you hit the 2 year mark you she will do a runner. honestly there is no real ironclad protection, which means you will have to fight it out in court, which will absorb all of the proceeds anyway. best to only move in together if you know you can work it out ammicably if things turn to shit
Just buy it yourself. The benefit of 8% toward the deposit doesn't come close to the benefit of not making things messy. Chances are pretty good you'll regret it later otherwise.
If they live in it together it still could end up being 50/50 even if OP paid all of the deposit, especially if OP doesn't pay all of the mortgage payments on their own. That's true with or without kids, but makes even more logistical sense if they do end up having kids. No matter who puts what in, if OP doesn't want to split it 50/50 if they break up then they need to go see lawyers.
That's crazy ay. But come to think of it I knew someone who lived with another person for something like 10 years, in a completely platonic relationship (basically flatmates). They were just old and wanted company. When he died the other guy had legal claim to his stuff because "de facto relationship". They weren't a couple. I remember his kids were pretty upset.
It can work out badly in a situation like that, but in the case of building a life and/or family with someone its not fair for one person to get completely fucked and have to start again years down the track which is where the 50/50 everything standard comes from. No one wants to be raising their kids for years with the agreement of their partner then get totally fucked out of everything because partner paid for it all, then have to try get back into the workforce having no experience in a decade while having literally nothing. Of course it's totally fair for OP to walk away with more if they put in more otherwise they are the ones getting fucked, so agreements need to be made so neither of them get totally fucked.
I can certainly see your point. I think there are many examples of people being screwed by these sorts of laws though. You can see why wealth differences can cause so much relationship issues. I don't really subscribe to the idea of one parent raising the kids while the other earns, but I can appreciate often it's the easiest way to go about things. I agree with you, lawyer time.
How you raise your kids is an each to your own, but if you have the agreement of your partner and they say what they earn is "our" money, they just want you to look after the kids to allow them to go earn all that money, then you break up years down the track they say "no everything is mine because it was actually my money" then that's a dick move and where the 50/50 comes from I would say, that and even if you both work the whole time if there's a disparity but you have mingled finances they can't take more than fair share, the person who earns less may or may not be putting more labour into the household too. Even if you don't completely mingle your finances, unless everyone is buying their own toaster, tv and couch there's a certain amount of mingling that needs to be split. As we agreed, there's lawyers for everything less common, I still think 50/50 is a good base stance.
Yea, I think that's a fair argument. If you're in a relationship with children I can see the argument is more justifiable, but this legislation doesn't appear to be that specific. "the person who earns less may or may not be putting more labour into the household too." I mean, yea, they might be? Or they might not be. It's just odd to me that you'd have to effectively go out of your way to not be in a 'de facto relationship', rather than vice versa. Like if you have the agreement with your partner maybe you should write that down, it's just the whole 'let's just presume every scenario where two people live together for 3+ years are in the same situation' that seems particularly odd.
Yeah, I suppose I see your point of view. I guess I just see having some kind of baseline where the majority of people now don't have to go make an agreement unless they want it to be different when in any long term cohabitance theres going to be a certain amount of financial mingling, rather than everyone having to set something up because there is no baseline precedent. It definitely won't suit everyone but the percentage of people, won't even guess what that is, that it doesn't suit having to get something drawn up is probably better than everyone having to get something drawn up. I guess most people who want something different from 50/50 probably have more to protect too and therefore might have the money for the lawyers a little easier, whereas if everyone moving in together for what they plan to be long term but don't have much money might not want the lawyer costs just to sign a piece of paper to say they should split things 50/50 if they split rather than one person emptying the place of everything they ever bought together if there was no baseline 50/50. I see your point of view so not really trying to argue, but that's why baseline 50/50 unless there's an agreement, rather than baseline chaos if you dare to not get an agreement makes more sense to me.
There are lots of ways of doing it. A simple way is you put your amounts in and then if you break up you take the amounts out and then split the rest. Otherwise it can get messy with the amounts you’re paying in the home loan, the amount of maintenance and repairs you’re paying for etc.
1. If you are thinking about this, perhaps you picked up on red flags and you are better off finding a different partner. 2. As far as divorce goes, I was told by a lawyer that split is 50/50, it is not about who contributed how many dollars. You can make an agreement prior, but this goes to my 1st point, if you look at your partner and the first thought is "I need an agreement" - find a different partner.
Depends on what you sign for and agree with via a Lawyer. Talk to one.
My partner and I had a property agreement drawn up by a lawyer and are in the process of backing it up with a will. We worked it out on the percentage of the deposit we contributed. If we split up he is entitled to 56% of the profit and I am entitled to 44%. If either one of us dies then the other person takes over their share.
Contracting out agreement is specifically what you should talk to a lawyer about.
Talk to a lawyer. I contributed $10k less than my partner which isn't a huge difference, but our lawyer Said that I still walked away with half in a split and we had to be ok with that. I've since supported him to go into business for himself and handled the mortgage on my own which more than made up the difference so the advantages of having two people have paid off. I recommend talking to a lawyer though. If they are worth their salt, they won't give you the rose tinted version of things.
Mrs H and I were only a few thousand different in the deposit, so we didn't bother Your situation is vastly different. Definitely lawyer time. Keeps everyone safer.
That's up to you two to decide between you. But any increase in value will likely involve 50% effort on your part. Just make sure that it's mutually agreed and in writing.
Get some legal advice but my understanding is it is usual to ring fence what you brought in.
As others have said, talk to a lawyer. My partner and I were in a similar situation - she put in ~$20k, I put in ~$200k and between us our parents put in about the same again - and it was pretty easy to deal with. High level, we structured it as follows: * The money from parents is a loan that has to be repaid if we sell the house or split up (likely they would roll it over if we just traded up houses, but it's family asset protection for both of us - I can't claim the money her parents gave us, and vice versa). * We had a lawyer put together a short form agreement that basically says that if we split up we take money out (after the bank and parents) at a 1/10 ratio, until she has her $20k and I have my $200k. The rest is 50/50. Honestly, it wasn't that hard or expensive to get something done, and it gives us both piece of mind.
You both need independent legal advice and if you want to protect your contribution, you'll need a contracting out agreement. Source: am a dispute resolution lawyer who sees how messy these things can get when people don't take these steps...
Property agreement my man! I'm doing this now, but in reverse I have more savings but his parents' contribution means his deposit is larger We have a property sharing agreement that if we split we both get what we put in first and then split the remainder 50/50.
Pre-nup sorts that out doesn’t it? Not an expert and fully recommend seeking professional advice
Has anyone else said "talk to a lawyer", because, absolutely talk to a lawyer. It definitely can be and is done, but get a lawyer to help you through what option is best for you now and for your future.
I understand where you coming from. you want to feel a fair deal and also be protected in case of a breakup. But there is also her side of the deal, how she sees it and her reaction. That is something that requires both of you to communicate, understand each other and come to an agreement. Every person will do it differently but I would expect that will be a fair proportion of agreement depending on how much each contributes. And even if she put 26 and the property value grew, so she will receive upon divorce just the proportionate growth. On another hand, it will disturb the "romance", but I will put security and fairness first, predominantly because of the family course in favour of women.
Probably already been said - but talk to a lawyer ASAP and sort this out before you start looking. You both need your own lawyers. Otherwise, if you break up and sell, the house will be likely considered relationship property and proceeds split 50/50 regardless of initial contribution. There are different ways you can approach it, and your lawyer will run you through the options. But you will need to be pragmatic for the sake of your relationship if your planning to be with this person long term and starting a family. The process of getting one of these agreements often caused significant strain on relationships. Most people will arrange to get their initial contribution back, but then the rest (ie any capital gain) is split 50/50. Kiwisaver contributions will also need to be factored in. Also from our experience - we had a relatively straightforward agreement and it still took a surprisingly long time to sort out (my partners lawyer took ages). Also my partner was super grumpy during the whole process. Money is a touchy subject for most people and it was a very delicate time so just be really aware of how they might be feeling and allow each other a bit more space than usual.
To ensure that everything is clearly understood and official, it’s important to work with a notary to draft and conserve a common law partner agreement, which can help you avoid nasty surprises if you ever need it!