Reader question: I bought a house with my ex-partner in 2004. Most of the money was mine – €46,000. We were going to live there but he left me and got married. He has three children of his own by a former wife, plus his present wife has a son by her ex-partner. We bought the property under tontine. He never paid any bills and left me paying the debts, including repairs to the roof. He has said in writing that he will give the house to me. I don’t want his children to inherit. However, it seems I might have to pay 60% tax on his part. Is there any other way I can become sole owner?
Let us first examine the potential consequences of doing nothing. If the property is held 'en tontine' when one of the owners dies, the other automatically inherits the whole property. However, if they are not married, then that is taxed at 60% of half the property value – a substantial cost.
The suggestion that he will ‘give’ the property to you is unattractive for tax reasons. His four children would need to consent to the gift, to confirm they would not challenge it in the future. Since at least one of them is a minor, a court would have to consent on the child’s behalf, and there is no guarantee of success.
The ex-partner could possibly sell to you, on the basis you have paid for all maintenance and costs, so he owes you this money. It may take some work to persuade him of the benefits of this option.
Doing nothing, though, is clearly a less attractive option. If he does not agree, then proceedings could possibly be commenced through the court as part of a family law matter to establish that a debt exists between the couple. The court proceedings could well be costly, long and burdensome, so are best avoided if you can agree to deal with the property properly.
Given the risks of a substantial tax burden being applied in France on the survivor, it must be in the joint interest of you and your ex-partner to reach a reasonable and amicable conclusion to the matter.