A cohabitation contract can also be an important document when you want to rent or buy a home and when taking out a mortgage or life insurance policy. Are you moving in with your partner who only owns the property? In the cohabitation contract you cannot ensure that the house becomes yours. It is possible, however, to record agreements in it so that you participate in the increase in value of the house, from the moment that you live together and also contribute to the home.
Right to return
In the event that you separate, a cohabitation contract is also important. Of course, because this agreement defines what belongs to whom. In this way you are both entitled to a refund of what you have contributed, including money and household effects. The cohabitation contract is also crucial because this document may include agreements on the right to continue to live in the house.
If one of you dies, it is extremely important to have a cohabitation contract. According to the law, persons who live together do not automatically inherit from each other. When you die, your own assets go to your family and not to your partner. With the so-called residence clause, it is possible to have it recorded in the contract that, in the event of the death of one of the partners, the joint ownership will be transferred entirely to the person who remains behind. For example, the jointly purchased house and the household effects. The survivor can then continue to live in the home, including the household goods. In this way the possession of the deceased does not inherit to his or her family. However, this goes directly to the partner.
Partner as heir
If you want your partner to become (also) your heir, you must have a will made in which you record this. If your partner inherits from you, it can make a significant difference whether you have a cohabitation contract or not and for the exemption from inheritance tax and the percentage of tax that must be paid (for the amount above the exemption). Without a cohabitation agreement, only a small amount is exempt from inheritance tax. In that case, thirty to forty percent tax is levied above this amount. With a cohabitation contract, however, an exemption applies up to a much larger sum. Above this amount, ten to twenty percent tax is paid.
Partner retirement and survivor benefit
Finally, a cohabitation contract is in many cases necessary to be eligible as a partner for the partner’s pension or survivor’s benefit. Without a cohabitation agreement, the pension will not be paid to your partner as a partner’s pension when you die. The result is that your partner is left behind unkempt in that respect.