Are you going to buy a house on credit? Learn about the importance of the marriage regime

Buying a house is an important step in the life of any couple, especially when it involves taking out a mortgage. It is essential to understand how the chosen marital status can influence the process of acquiring and financing the property.

In Portugal, there are three marital statuses provided for by law, each with different implications for real estate:

• Community property regime (the most common): In this regime, only assets acquired after marriage are considered common property. The assets that each spouse owned before marriage remain their individual property.

• General community property regime: All assets, regardless of whether they were acquired before or after marriage, are considered common property, except those expressly excluded by law (e.g. inheritance with an incommunicability clause).

• Separation of property regime: Each spouse retains exclusive ownership of the assets acquired before or after marriage. However, there may be assets belonging to both spouses when they are acquired jointly (in this case, the co-ownership regime applies). This regime is mandatory when one of the spouses is over 60 years old at the time of marriage.

These three property regimes are established by the Civil Code in section IV: community of acquired property (article 1721), general community of property (article 1732) and separation of property (article 1735).

The marital regime not only influences the ownership of the property acquired, but also the financial responsibilities associated with the mortgage. The way in which the loan will be taken out and how the property will be shared depends directly on the regime chosen.

Community of acquired assets

In terms of credit, both spouses will be considered to be the applicants for the loan. Both will have joint responsibility for returning the amount financed, and any default may affect both.

General community of assets

In this case, both spouses are equally responsible for the housing loan. In other words, the loan will be requested in both spouses' names, and both spouses will have to assume financial responsibility.

Separation of assets

If the loan is taken out by only one of the spouses, the property will be the exclusive property of the spouse who took out the loan. However, they may decide, by mutual agreement, that both will assume financial responsibility for the house purchased. In other words, if the loan is taken out by only one spouse, the other spouse will not have direct responsibility for paying the loan, unless this has been formally agreed.

There is also an alternative, if you choose not to follow the acquired property regime, by signing a prenuptial agreement, so that the general community of property or separation of property regimes are valid.

The choice of marriage regime has a direct and significant impact on the purchase of a home and the management of a mortgage. Depending on the regime adopted, financial and property responsibilities can be shared in very different ways, which makes a well-informed decision essential.

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Source: IAD Portugal