Equalization payment (soulte)
A cash payment made by one co-owner to another to compensate for an imbalance during the division of a jointly owned property, most commonly on divorce or in an estate. When one ex-spouse takes over a jointly owned home, they pay a soulte to the other. Financing this payment may require a specific mortgage, sometimes secured by a charge over the property taken on.
Key points
- Arises on divorce, inheritance, or exit from co-ownership.
- Typically equals half the value of the share not retained by the party paying the soulte.
- Can be financed by a mortgage secured against the property being taken over.
- Subject to a partition duty (currently 2.5%) calculated on the net value of the divided property.
Frequently asked questions
How can a soulte be financed following a divorce?
The spouse keeping the property borrows the soulte amount (often rolled into a refinancing of the existing loan) to pay the other. The bank assesses the repayment capacity of the sole remaining borrower alone, without the departing co-borrower's income. The broker plays a key role by anticipating this analysis and selecting a lender willing to finance this structure.
Why are partition duties applied to the soulte?
Partition duty is a state tax levied on the judicial or amicable division of jointly owned property, regardless of whether a soulte is paid. It is calculated on the total net value of the divided property (after deducting debts) and is currently set at 2.5%. This cost is in addition to notarial fees and must be included in the total financing requirement.
How is the property valued to calculate the soulte?
If there is an amicable agreement, the ex-spouses can agree on a value between themselves, often based on an estate agent's appraisal or a surveyor's report. In the event of disagreement, the judge may order a judicial valuation. The figure used is the market value of the property at the time of division, less the outstanding mortgage balance, to determine the net value to be divided.
In practice
On a divorce, a property valued at €400,000 carries a remaining mortgage of €100,000. The net value is €300,000. The spouse keeping the property pays a soulte of €150,000 to the other and refinances everything in a new loan of €250,000 (soulte + redemption of the existing loan).
Official sources
- Division of estate assets (balancing payment) · Service-Public.gouv.fr
- Sale agreement and loan condition precedent · Service-Public.gouv.fr
- Housing and financing information · ANIL