Property in the equalisation of accrued gains – initial assets, final assets and valuation dates

Who owns the property – and which change in value is relevant?

Under German law, the statutory matrimonial property regime of the community of accrued gains (Zugewinngemeinschaft) does not mean that all assets automatically become jointly owned during the marriage. A property may belong to one spouse alone and still be highly significant for calculating that spouse’s accrued gains.

Conversely, a property may belong to both spouses without the amount of an equalisation claim being derivable from the property value alone.

When the property already formed part of the initial assets

If a property already belonged to one spouse when the matrimonial property regime began, its value at that time generally forms part of that spouse’s initial assets. For valuing initial assets, § 1376 BGB refers to the value at that point in time.

For the property valuation, the value at the start of the matrimonial property regime and the value as at the relevant final date may therefore be needed. The difference between these property values must not simply be equated with the accrued gains under family law.

Property bought during the marriage

If a property was acquired during the marriage, this does not automatically mean that only one property value is needed for every question. Ownership, financing, other assets and the reason for the valuation have to be distinguished.

If the question concerns the property value within final assets, the focus is generally on the value as at the relevant date. Who receives which economic share cannot be determined simply by halving the property value.

Property value as at a past date

If a property was already owned many years before the divorce, or was inherited or received as a gift during the marriage, a valuation date far in the past may be relevant.

Such a valuation is not simply a backward calculation of today’s market value using a general price index. Under § 2 ImmoWertV, the general market conditions on the valuation date and the relevant condition of the property must be taken into account. Standard land values, property market data and sale prices from that time, as well as the state of construction and modernisation at that time, may be relevant for this.

Any adjustment for inflation of initial assets under family law, on the other hand, is not part of the property valuation.

When different property values are under discussion

An expert property valuation does not decide a family law dispute. It can, however, set out transparently which property value results from the property’s characteristics and market conditions as at the specified date.

An existing valuation can also be examined as part of a plausibility review or expert statement.

If no agreement can be reached on a jointly owned property, a partition auction may also come into consideration.

Which documents are needed?

• Land register extract
• Cadastral map
• Building drawings and floor plans
• Living and usable area calculations
• Details of the year of construction and modernisation
• leases and rent schedules, if applicable
• Information on rights and encumbrances
• any earlier reports or valuations
• Documents on the condition of the building at the time
• clear specification of the valuation date or dates required

For family law or court matters, the relevant valuation date should, if possible, be specified clearly by the instructing lawyer or from the court documents.