Construction Financing - Financing Models for Unmarried Couples

Exactly, everything changes with children.

Without children, the model P1 stands alone in the land register and financing, P2 probably pays half of the ancillary costs, which is relatively fair. This way, P2 can also save for old age in parallel.

As soon as children are involved and P2 no longer works, or no longer fully works due to childcare, it becomes unfair. P2 can save to such an extent, if at all, and accepts years of lost income, while P1 can continue to build their career.

That’s why I wouldn’t advise any woman / man to pay rent to the other.

Partner 1 owns a property with an existing building valued at approximately €550k from his [..] owes €115k to a relative, whom he must pay off (Partner 1 alone is listed in the land register for this [..] has about €10k available savings [..] The renovation project costs about €200k; depending on the financing offer, up to €300k is planned [..]

I would calculate the following from the numbers: Equity Partner 1: €435k Equity Partner 2: €10k Loan: €300k jointly taken (thus attributed 50% each). Total value: €745k Therefore, in total Partner 1 pays: €435k + €150k, which is 78.5% Partner 2: €160k, which corresponds to 21.5% Thus, each has taken their initial assets into account, which participate in the property’s value development accordingly, and the joint loan is fairly distributed in the sense of the marital community of accrued gains. Partner 2 is also liable for it and possibly takes care of the children, etc. The accrual model is indeed fair because regardless of how much money someone receives, both partners work 100%. One perhaps traditionally for money, the other partner with the shared children. A very fair arrangement in an equal partnership. By the way: If you draw up a contract, also clarify how quickly and under what conditions the house must be sold. After a separation, Partner 2 is still stuck with the loan, and as long as the bank does not release Partner 2, Partner 2 has no possibility to acquire a new house with a new partner. Even if the loan amount is not high, there is still the risk that Partner 1 might not or cannot pay due to unemployment or something similar, but can block a sale or payout of the other party without a contract for a very long time. In principle, I can only recommend freeing yourselves from the idea that one person is entitled to more money than the other. You want an equal partnership, and the weaker partner will inevitably benefit from the other’s money. Again, view the shared time as a community of accrued gains in the sense of a traditional marriage; then it is the fairest. (Or the often-mentioned rental variant: 50% of the loan share of the mortgage + 50% of ancillary costs.)