- The court treats all of a couple’s assets as family assets and divides them on fair principles.
- Even if a flat is in one name only, the other spouse may be awarded part of the interest in it by the court.
- If a couple jointly own a property, the final ruling will not necessarily give each of them half the title.
- Buyers should search the register to identify a property in matrimonial proceedings and weigh the risk.
In a divorce case, assets in Hong Kong and overseas are all counted. Disputes over dividing property can usually be settled out of court: 7 to 8 cases out of 10 are resolved this way.
If you cannot reach an agreement on dividing property, you need to ask the Family Court to decide how it is divided.
Will a divorce completely separate your property? The principles for dividing title on divorce
Where appropriate, the Family Court will consider whether a “clean break” can end the financial ties between the two of you.
A “clean break” means dividing the property, or paying a lump sum, or both, once and for all, so that you no longer have to worry about the pain of the divorce and can start a new life.
Please note
- Whether a “clean break” can be used will depend on the paying spouse’s financial position.
How the court divides title to a home and its land in a divorce
If a couple applying for divorce cannot agree on title, the court must settle it, and the court will rule under the Matrimonial Proceedings and Property Ordinance (Cap. 192).
How a property is held affects the court's decision, but do not assume that a property held in one person's sole name will escape division on divorce.
Even if a flat is in one name only, the other spouse may be awarded part of the interest in it by the court.
The court treats all of the couple's assets, including bank deposits, property, shares and funds, as family assets and divides them on the principle of fairness.
On the other hand, if you jointly own a property, the final ruling after the divorce will not necessarily give each of you half the title.
Dividing assets on divorce must take into account each spouse’s different interests, and the court will generally consider the following:
- Each spouse’s present and expected income, assets and other financial resources
- Each spouse’s present and expected financial needs and expenses
- The standard of living before the divorce
- Each spouse’s age
- The length of the marriage
- Each spouse’s physical and mental health
- Each spouse’s contributions to the family (for example, looking after relatives)
- Any benefit each spouse loses because of the divorce, such as a pension
- The interests of the children
- Advice on preparing before a divorce
- division of assets following a divorce
- Dividing title on divorce
- [Buy early] See this issue’s top property picks
If a property is in only one name, will it be divided on divorce?
Contact us to check how your property is held and your circumstances.
How the court deals with it: selling or transferring the matrimonial home
After weighing the factors on each side, the court makes an order on title, a property division order, which generally takes one of three forms:
- An order to sell the property
- Transfer of the property to the other spouse
- The two of you keep owning it jointly
In dealing with the matrimonial home, the court’s powers are wide.
Selling the matrimonial home
One kind of order is for the court to require you to sell the flat, with the proceeds divided in the amounts you agree.
If you cannot agree, the court decides the amounts, weighing each spouse’s contributions to the family, needs, financial burdens and so on to decide what each should receive.
Transferring title on divorce
The court also has power to require one spouse to transfer title to the other.
In many cases, if the wife is awarded custody of the children, the court may award her the home even if the husband was its sole owner, to protect the children's future standard of living.
But if the property is worth more than the wife is entitled to, the court may require her to pay a sum to her husband.
Because it is a court order, neither of you has to pay stamp duty.
Please note
- When a flat with an unpaid mortgage is transferred to the other spouse, the mortgage deed must also be put in the new name, with the lender’s consent.
- If the transferee fails the stress test, the bank may ask for an extra guarantor.
Transferring title to the other spouse raises another question: if the home is still mortgaged to a bank, how should the mortgage repayments be arranged?
- If either spouse can afford to redeem the mortgage on the home, the problem is solved.
- If neither can afford to redeem the mortgage, the solution is to transfer the mortgage to the wife’s name (with the mortgagee bank’s consent first, of course), and she pays the monthly repayments.
- If needed, the mortgagee bank can ask the husband to guarantee the repayments.
Joint ownership of the matrimonial home, and conditions for sale
Another kind of order is for the court to rule that you keep owning the property jointly, and may sell only in stated circumstances, for example when one spouse dies or remarries, or the children finish school.
The proceeds are shared equally, as you agree or as the court decides.
You jointly own the matrimonial home, but only the wife (or the spouse living with the children) has the right to occupy it, and the home is sold in these circumstances:
- A date you both specify
- When the wife dies, remarries or lives with another person
- When the youngest child reaches a set age or finishes their studies
The proceeds can be divided in the amounts you agree. If you cannot agree, the court decides the amounts.
Please note
- When a spouse claims an interest in a property on divorce, they can register the divorce proceedings with the Land Registry. This tells any buyer who wants to buy the property that title is disputed and awaits the court’s decision.
- Why hire a solicitor for your divorce: the benefits and why it matters
- [New developments] Search the most popular new homes
Spotting a divorce property: look for “complications attached to the property”
A buyer must spot a property caught up in matrimonial proceedings by doing a land search, and weigh the risk.
Please note
- A property caught up in a divorce may be subject to a court injunction that restricts resale. A new buyer who wants to buy a property in matrimonial proceedings may sign a sale and purchase agreement and still be unable to get vacant possession.
Generally, when a property is involved in matrimonial proceedings, the “encumbrances” column on the Land Registry's register will show: “Certified True Copy of Notice of Intention to Proceed with An Application for Ancillary Relief”.
The following wording may also point to a divorce property:
| Wording in English | |
|---|---|
| Divorce petition | Divorce Petition |
| Divorce decree: ground of behaviour | Order: Divorce Behaviour |
| Deed of partition | Deed of Partition |
Not sure whether a property is caught up in matrimonial proceedings?
Contact us to check your property’s title.
Note: a property in matrimonial proceedings may not get a mortgage
A buyer thinking of buying a property in matrimonial proceedings should not only do a search to find out whether it is in proceedings, but also understand the risks involved.
A mortgage may not be approved
A property the court orders to be transferred is transferred without payment. It can be treated as one kind of gift-deed property, for example where an owner transfers it to a spouse by deed of gift.
Please note
- The owner transfers the property to the other spouse by deed of gift. So, as with any gift-deed flat, the property may be recovered if the owner becomes bankrupt, and a bank may refuse a mortgage application.
Transfers are hard
A property in matrimonial proceedings may be treated as a gift-deed flat, so its value falls, and new buyers worry about not getting a high loan-to-value mortgage, which makes it harder for the new owner to resell later.
Dividing title on divorce is complicated. You need to state your wishes clearly to protect your interests.
On the other side, a prospective buyer should also understand the risks of a property in matrimonial proceedings, so as not to lose more than they gain.
FAQ: does someone else’s contribution to a divorce property affect the division?
If a third party contributed money when the property was bought, that part is not included in the division of the couple's property.
For example, a couple buy a HK$5 million flat and the husband's mother pays HK$1 million of it. On divorce, the husband's mother will hold that amount, or a part interest in the property.
If a spouse sold a property you had paid for before the divorce, can you claim for your loss?
Yes. In one case, a wife sold, without her husband’s knowledge, a property she was paying for.
The court held that title to the flat belonged to the husband, and ruled the sale void.
[Rent or sell] Landlord zone:
- Letting basics | Tips for listing online
- Tips for buying to let | Property tax calculation | CR109 filing
- How to spot a problem tenant | Chasing rent and recovering your flat: Dos & Don’ts | How bailiffs recover possession
- Rates and Government rent | Government rent and land tax | Rating and Valuation Department services
- Transferring a property into a new name | Gift-deed flats | Long-lived title deeds | Properties in an estate
- Owners’ corporations | Property management companies | Owners’ committees | Mutual aid committees
- Deed of mutual covenant restrictions | Guarding against bid rigging in building works
- Landlord loans
If family members have contributed to a property, how is it dealt with in the division?
Contact us to check your contributions and title.
