Insights

Can Ningbo divorce agreement agree that the property before marriage belongs to the other party?

Ningbo Author：LuXu WANG

Mr. Zhang bought a house in full before marriage, but when he divorced, he stated in the agreement that "the house belongs to Ms. Li 」. Afterwards, Mr. Zhang repented and refused to transfer the ownership. Similar situations are not uncommon in Ningbo marriage and family counseling: one party wants to exchange premarital property for custody or end the marriage as soon as possible, while the other party is worried about whether the agreement can be honored and what taxes will be paid when the transfer is made.

This kind of agreement is legally allowed, but whether it can be successfully fulfilled and how the tax burden is calculated need to be comprehensively judged in combination with the civil code, tax law and real estate registration rules.

1. legal basis

article 1076 of the the People's Republic of China Civil Code stipulates that if both husband and wife divorce voluntarily, they shall sign a written divorce agreement and apply for divorce registration at the marriage registration authority in person; the agreement shall state the intention of both parties to divorce voluntarily and the opinions on matters such as child support, property and debt handling.

Article 69 of the Interpretation (I) of the Supreme People's Court on the Application of the Marriage and Family Part of the the People's Republic of China Civil Code stipulates that the provisions on property and debt handling in the divorce agreement signed by the parties in accordance with Article 1076 of the Civil Code are legally binding on both men and women; if a lawsuit is filed due to a dispute over the performance of the above-mentioned agreement after the registered divorce, the people's court shall accept it.

Article 1 of the Notice of the Ministry of Finance and the State Administration of Taxation on Issues Related to Individual Income Tax on Houses Granted by Individuals (No. 78 [2009] of the Ministry of Finance) stipulates that if the owner of a house gives the property to his or her spouse free of charge, no individual income tax shall be levied on both parties concerned.

The current value-added tax policy stipulates that the division of divorced property and the transfer of house property rights within the scope of free gifts to spouses and other close relatives can enjoy VAT exemption according to regulations. In actual operation, the latest caliber of the tax authority shall prevail. It is recommended to call 12366 in advance or go to the tax service hall where the real estate is located for confirmation.

2. core points

  • autonomy is protected. Although the premarital property is personal property, the owner has the right to dispose of it in the divorce agreement, which is not invalidated by the fact that the property was acquired before marriage.
  • The effect of the change of real right is not produced until the registration. The divorce agreement only produces the effect of creditor's rights, and the transfer of ownership of the house shall be subject to the registration of real estate.
  • The tax burden needs to be differentiated. Personal income tax and value-added tax are usually exempted when they meet the conditions; deed tax, stamp tax, real estate registration fees, etc. are not exempted, and the specific amount depends on the area of the house, the number of units, and local policies.

3. boundary conditions

  • the agreement must be based on the true intention of the parties and there is no revocable situation such as fraud, coercion or manifest unfairness.
  • The content of the agreement shall not harm the legitimate rights and interests of creditors, and if the property is transferred in bad faith to evade the debt, the creditor may claim cancellation in accordance with the law.
  • If there is a mortgage, seizure or co-owner of the house, the right restriction must be lifted or the consent of the relevant right holder must be obtained, otherwise the transfer cannot be completed.
  • If there is still a bank loan outstanding before marriage, it is necessary to negotiate with the bank to change the borrower or pay off in advance, otherwise the registration institution usually does not handle the transfer registration.

4. operational steps

  1. negotiate and draft agreements. Clear housing location, title certificate number, owner, transfer time limit, loan processing, liability for breach of contract and other provisions.
  2. Divorce registration. Both parties bring the divorce agreement and other materials to the marriage registration authority, and the agreement will take effect after receiving the divorce certificate. The Ningbo area can make an appointment for marriage registration through the "Zhejiang Office" APP "Zhejiang Marriage", and one party's household registration can be made in Zhejiang Province; after the expiration of the 30-day cooling-off period from the date of application, both parties must jointly arrive at the scene to collect the certificate, and the overdue is deemed to be withdrawn (according to the Ningbo Civil Affairs Bureau's "Divorce Registration Service Guide for Mainland Residents").
  3. To settle loans and taxes. Contact the bank, tax and real estate registration center in advance to confirm the deed tax, stamp duty, registration fee and required materials that should be paid; Ningbo area can call 12366 tax service hotline or go to the tax service hall where the real estate is located to confirm the latest caliber.
  4. Application for registration of real estate transfer. Holding divorce certificate, divorce agreement, identity certificate, real estate certificate and other materials for transfer; If the agreement is not clear, supplementary agreement or judicial confirmation may be required.
  5. Retention voucher. Properly keep the tax payment certificate, registration receipt and new real estate certificate for subsequent disputes.

5. common mistakes

  1. myth 1: As long as the agreement says that the house belongs to me, the house is mine.. Positive solution: Before the transfer, the ownership of the house has not been transferred, and the other party may still be seized or disposed of due to a debt dispute.
  2. Myth 2: Divorce housing all taxes do not have to pay. Positive solution: personal income tax and value-added tax are usually exempted when they meet the conditions, but deed tax, stamp duty, registration fees, etc. may still be generated, and there are differences in the implementation caliber of different regions.
  3. Misunderstanding 3: The other party can only renegotiate if it goes back on its word.. Positive solution: The divorce agreement takes effect after the registered divorce. If one party fails to perform, it can sue the court for performance, and if necessary, it can apply for enforcement.
  4. Myth 4: The agreement that the property belongs to the other party before marriage is a gift, which can be revoked at any time.. Positive solution: the property arrangement in the divorce agreement is related to the status relationship, child support, debt commitment and so on, usually can not simply apply the general gift contract of arbitrary revocation right.

Practical Experience of 6. Lawyers

the divorce agreement stipulates that the property before marriage belongs to the other party, which is legally allowed. Such agreements signed by both parties voluntarily are binding, and the party who repents is usually responsible for the consequences of continued performance or compensation. It is not exactly the same as an ordinary gift, because it is part of the overall divorce scheme and is often linked to the distribution of maintenance and other property. Therefore, when judging, we should not only look at the sentence "the house was owned before my marriage", but also see whether the whole agreement is the true meaning of both parties, whether there is any consideration, and whether it has been exchanged for other benefits. In practice, a party who wants to exchange pre-marital property for custody or end the marriage as soon as possible is usually supported, provided that the agreement is clearly written.

When it comes to operation, the most important thing is to write the agreement "real": specify the room number, property right status, transfer time, who will bear the taxes and fees, and the handling method for one party not to cooperate. If you can handle the transfer, don't delay it. Once the registration is completed, the space for the other party to go back on its word will be greatly reduced. If it cannot be done for the time being, it is also necessary to stipulate the liability for breach of contract and the path of realization in the agreement, so as to leave a good grasp for possible litigation in the future. Taxes and fees should be known in mind: personal income tax and value-added tax involved in the division of divorce property usually have tax exemption space, but deed tax, stamp duty and registration fees still need to be handled according to local regulations. Don't omit the cost. It is easier to reach an agreement when negotiating this piece together.

There are also two pits to guard against. One is to sign an agreement on impulse-the other party gives in for a moment and changes you to sign an obviously unfair plan. After thinking about it, you regret it, but it has already taken effect. The divorce agreement is not a draft, and everything is calculated clearly before writing. The second is to separate the real estate agreement from the alimony and debt commitment in the agreement. As a result, the house was given up, but the rest of the property was not clearly written, and each said his own words afterwards. A safer approach is to put real estate, dependency, property, and debt in an agreement to make the concessions and gains right. To the point where the other party refuses to perform, don't be impulsive to "block the door", but sue, apply for enforcement, and use procedures to honor the agreement.