Buying a home is a major milestone, especially for couples and families. Often, for practical or strategic reasons, a seemingly advantageous solution is chosen: the property is jointly owned by both partners, but the mortgage is taken out by only one person. This choice, while common and sometimes necessary, hides legal, tax, and personal implications that are crucial to understand to avoid unpleasant surprises in the future. Fully understanding what it means to separate property ownership from debt liability is the first step toward a conscious and secure decision.

This arrangement can arise from various needs. Perhaps one partner has a more stable job or a better credit profile, providing more reassurance to the bank. In other cases, it might be a choice dictated by age-related factors or access to specific benefits. Regardless of the motivation, it is essential to analyze the rights and duties of each party, both toward the lending institution and between the partners themselves. This article explores all aspects of this complex situation in detail, offering a clear guide to the risks, protections, and solutions available in the Italian context.

Why Is the Mortgage in Only One Name?

The decision to have the mortgage in only one partner’s name, while buying the home together, is rarely random. Before granting such a significant loan, banks conduct a thorough analysis of the applicants’ income and financial situation. Often, the financial stability of a single individual is more convincing than that of two people with less stable incomes or complex credit histories. For example, a partner with a permanent employment contract and a good income is more likely to get the mortgage than a couple where both have non-standard contracts or occasional jobs. Delving into how the bank evaluates your job type can clarify many of these mechanisms.

In other contexts, the choice may depend on age factors, which influence the maximum loan term, or the desire not to involve the other partner in a long-term financial commitment. Sometimes, lending institutions themselves prefer a single debtor with solid guarantees, simplifying the process. Whatever the reason, this setup creates a clear separation between the debt relationship with the bank, which concerns only the signatory, and the property right to the home, which belongs to both co-owners on the deed of sale.

Property Ownership vs. Mortgage Liability

It is crucial to understand the fundamental distinction between being a property owner and being a mortgage holder. Ownership is defined by the deed of sale, the so-called rogito notarile (notarial deed). If this document lists two people as buyers, both own the property in the specified shares (usually 50% each). This ownership right is independent of who pays the loan installments. On the other hand, the mortgage agreement is a separate contract between the bank and the borrower. The person who signs this contract is the sole debtor in the eyes of the lending institution.

This split has enormous practical consequences. In the event of non-payment of installments, the bank can only take legal action against the assets of the mortgage holder. However, the primary guarantee for the loan is the lien, which is placed on the entire property, including the ownership share of the non-borrowing partner. This means that in case of serious default, the bank has the right to foreclose on and auction the entire house, even if one of the owners has no direct debt with it. This dynamic exposes the non-debtor co-owner to significant risk.

Legal Implications in Case of Separation or Divorce

When a relationship ends, managing a jointly owned home with a single-name mortgage becomes particularly complex. The legal consequences vary depending on the couple’s marital property regime (if married) and the agreements made. For married couples in a community property regime, a home purchased during the marriage belongs to both, even if the deed lists only one name. The mortgage debt, however, remains the personal responsibility of the spouse who signed for it. In a separation of property regime or for unmarried partners, ownership is divided according to the shares indicated in the deed.

In the event of a separation, the spouse whose name is on the mortgage remains solely obligated to pay the installments. However, when determining alimony or spousal support, a judge may take this expense into account. The most common solutions to resolve the situation are three: a mortgage assumption, where one partner buys the other’s share and takes over the entire debt (with the bank’s consent); selling the property to pay off the debt and split any remaining proceeds; or, if there are children, assigning the house to one parent who will continue to live there.

Protecting the Partner Not on the Mortgage

The partner who is a co-owner of the home but not the mortgage holder is in a vulnerable position. Although they have a real property right to the home, they have no direct control over the debt that finances it. The biggest risk, as mentioned, is the borrower’s default, which could lead to the loss of the entire house. For this reason, it is essential to take preventive protective measures. The most effective tool is a private written agreement, a contract drawn up between the partners, preferably with the assistance of a lawyer.

This document can regulate the internal relationship, establishing that even if the installments are paid from a single bank account, the financial burden is in fact shared. It can define the terms for reimbursement of sums paid in the event of a separation or sale of the property, avoiding future disputes. For example, it can be agreed that the non-borrowing partner will contribute to expenses with periodic payments or that their contribution will be considered a form of participation in the family investment. Without a written agreement, proving such contributions later can become extremely difficult.

Tax Aspects and Interest Deductions

An often-overlooked aspect concerns tax deductions for mortgage interest. Italian law is very clear: the right to the 19% IRPEF deduction belongs only to the person who is both the mortgage holder and the owner of the property used as a primary residence. In the situation of a jointly owned home and a single-borrower mortgage, the sole mortgage holder can deduct the interest, but only in proportion to their ownership share. For example, if they own 50% of the property, they can deduct 19% of the interest calculated on half of the maximum allowed amount.

However, some more recent interpretations and court rulings have clarified that if the borrower bears the entire payment, they can deduct the full amount of interest, up to the maximum limit of €4,000, provided the property is their primary residence. The co-owner partner who is not on the mortgage, however, is not entitled to any deduction, even if they contribute financially to the payments. This tax asymmetry represents an economic disadvantage that must be considered. For a complete overview, it is useful to consult the guide to mortgage deductions and tax benefits.

Practical Solutions and Alternatives

Before opting for the “one borrower, two owners” setup, it is wise to evaluate alternatives that might offer greater balance and security. The most transparent and recommended solution is to have both the property and the mortgage in both names. This way, rights and duties are equally divided, and both partners can benefit from tax deductions based on their share. Although it requires both applicants to have sufficient credit qualifications, this option prevents most of the problems described.

Another possibility is for the partner with less income security to act not as a co-borrower, but as a guarantor or third-party mortgagor. In this role, they do not become a direct debtor but offer an additional guarantee to the bank, strengthening the mortgage application. This option can be a good compromise, although it still involves specific risks. To better understand this role, it may be helpful to read the article on the third-party mortgagor, with its risks and advantages. Finally, consulting with a notary or a financial advisor is always the most important step in choosing the structure best suited to your needs.

Conclusion

The choice to have the mortgage in one person’s name while co-owning the property is a double-edged sword. While it can facilitate access to credit, it also introduces a series of legal, tax, and personal complexities that should not be ignored. The risks, especially for the non-borrowing partner, are real and can emerge disruptively in the event of the debtor’s default or the end of the relationship. The loss of the right to a tax deduction for one of the co-owners is another economic disadvantage to consider.

To face this situation with peace of mind, the key word is planning. It is essential to communicate openly, fully understand each person’s rights and duties, and formalize internal agreements through a private written contract. The advice of professionals like notaries and lawyers is not an unnecessary expense but an investment in protecting your future. Carefully evaluating all alternatives, such as joint ownership of both contracts or the use of guarantees, allows you to find the right balance for a life project as important as buying a home.

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