How to calculate the amount needed to buy out a spouse's share of a house

Written by jeannine mancini | 13/05/2017
How to calculate the amount needed to buy out a spouse's share of a house
In a divorce, you and your spouse should consider the best option for dividing your assets. (old house image by Tom Oliveira from

Property division is a common and important distribution matter in a divorce. In some cases the home is liquidated, and the profit is split. In other cases, one spouse buys out the other's share of equity. When you decide that your best option is to buy out your spouse's share of the house, you will need to calculate the amount you need to pay.

Acquaint yourself with asset division laws in your state. Depending on your state, the house may not be an equal split. Some are classified as equal-distribution states, while others are community-property states. An equal-distribution state does not divide property equally. Instead, both partners financial stability plays a role. A community property state divides the assets equally.

Hire an appraiser. Try to agree to a joint appraiser to determine your home's current market value. Make several copies of the appraisal.

Calculate the buy-out price by subtracting any debt associated with the home, such as a mortgage, from the appraised value. Divide the amount left in half or by whatever amount the court determines your share. For example, if after the mortgage payoff you are left with £65,000 and the court declares your spouse is entitled to a third of the value, you must pay £21,666 to buy out his share. It is important to note that courts usually will not consider any future adverse capital gains taxes or any future sales commission costs since the home is not being sold. You will be required to pay these additional expenses when you choose to sell the home.

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