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Beware the tax implications of keeping a home in a divorce

On Behalf of | Jul 14, 2017 | Divorce

When you and your spouse divorce in Texas, figuring out how to fairly approach property division is rarely simple. As a community property state, deciding what to do with a marital home can be quite difficult. A home often acts as both an asset and a liability, so before you fight tooth and nail to keep it, consider how it may impact you as a single person.

Even if you do not have a mortgage payment to consider, there are other expenses that you might not realize. The home will eventually require upkeep and maintenance, so it is important to keep these expenses in mind when you consider the value of keeping it.

Furthermore, there are many circumstances that can trigger a reassessment of the tax value of the property. It can be very difficult to keep up with property taxes, especially if you are used to them being built into a mortgage payment.

If the home is already solely in your name and will remain that way, then you may not have any immediate tax concerns. However, if the ownership of the home changes in the course of the divorce, a reassessment may occur. Similarly, if you improve the home, this may trigger reassessment.

Even if you do nothing to the home, the tax rates can rise if the overall home values of the area rise.

All in all, it is very important to consider all the implications of any asset you choose to fight for in a divorce negotiation. A home can be wonderful thing, but can also become a nightmare without proper planning. An experienced attorney can help you examine your circumstances and determine if keeping the home really is the best choice for your needs as you build a divorce strategy that protects your interests.

Source: Findlaw, “Impact of Changing Property Values on Property Taxes,” accessed July 14, 2017