New construction with existing land

Hello everyone,

my partner and I (not married yet, but basically a matter of time) have set our sights on building a home. Fortunately, we have already been gifted a 650 sqm plot by my partner’s parents. It has already been transferred. I am not listed in the land register. A notary has already drafted a possible exit. (This was important to me, especially since the prospective parents-in-law were somewhat reluctant about the land register.)

A brief introduction about us: We both have degrees – which doesn’t mean much – and we live rurally in Lower Saxony. Bremen and Osnabrück are each 60 km away. My partner receives a civil servant salary of A13 and I have a net income of 2,000 euros monthly without commissions (sales job). Possible commissions and raises are not included. We have our own vehicle and I have a company car.

This results in a total monthly net income of 5,500 euros. My partner owns equity in the form of a plot valued at 100k. I have monetary equity of about 20k and my partner also has 15k on the “savings book.”

We envision a single-family house with 180 sqm and a double garage and have already held discussions with an architect (and for comparison Viebrockhaus). The single-family house is planned at 385k including VAT and incidental costs. I would prefer a loan of 420k euros (i.e., with an 11% reserve excluding our 35k). Financing at about 1.5% interest over 30 years fixed rate would roughly mean a repayment of 1,500 euros plus incidental costs of 400 euros: so ongoing costs per month of 1,900 euros (with a net income of 5,500 euros = 3,600 net would remain for living and retirement provision).

Currently, I save 450 euros monthly in funds, my partner is more conservative and prefers the interest from the savings book. Since we are not married, I don’t want to make any assessment here.

So, dear forum users, what do you think about my financing plan?

- Now in the Corona crisis, I had the idea to calculate KuG/illness/unemployment. The repayment would remain the same, but our income would then change monthly to about 4,600 (unemployment) or 5,000 (KuG) net. Here we would be at the lower limit of repayment, but still feasible in my opinion.

I look forward to a discussion with you.

Regards

phil12345

A notary has already drafted a possible exit. (This was at least important to me, after the prospective in-laws were somewhat opposed to the land register.)

May I ask how you have now solved this in detail? How should I imagine it, will you not be listed in the land register even after construction? I am only asking because we might face a similar "problem."

From a financing perspective, I would say it works for you, but in your position, I would replay the scenario of having children, in case that could come into consideration.

As of now, I would not be listed in the land register even after the construction. We have agreed on a partnership contract with the notary, which includes the separation accordingly. That means if our paths ever part, I would be the one to leave the shared house. I would then receive 50% (we each want to pay half of the construction) plus appreciation (or minus depreciation) and could then look for something new. Quite pragmatic. The notary said that this is customary. Since I am not going into the land register as of now, this is the only way for me to protect myself.

As of now, I would not be listed in the land register even after the construction. We have agreed on a partnership agreement with the notary, which includes the separation accordingly. That means, should our paths ever separate, I would be the one to leave the shared house. I would then receive 50% (we each want to pay half of the construction) plus appreciation (or minus depreciation) and could then look for something new. Quite pragmatic. The notary said this is common practice. Since I am currently not in the land register, this is the only way for me to secure myself.

Ok, thanks for the explanation. In theory, that sounds quite nice and understandable, but in practice, I somehow find it difficult to implement. The only thing that actually gains value is the plot of land itself; the house should at most remain constant, more likely decrease in value due to wear and tear, or is the total value simply determined, the original 100k for the land deducted, and the remaining amount divided by two?

The actual meaning behind it for me was that I wouldn't diligently pay for the house and end up "empty-handed" because in the event of a separation I wouldn't get anything "back" since it is not my property. Whether there will even ever be a separation, etc. (the topic of a bitter divorce), and how things will then proceed, is anyway unpredictable. According to the notary, however, I am absolutely not disadvantaged despite not being entered in the land register. I will, however, discuss this again with a lawyer friend before the loan agreement is finalized.

Or just get married...

Is it possible to reasonably determine in advance how the valuation of the house with or without the land will be conducted in case of need? Otherwise, anyone can arbitrarily set the value higher or lower, and there you have it, the [Rosenkrieg].