Can a Married Couple Buy a House Under One Name?

Married couples can purchase a house titled under only one spouse’s name. This decision has legal and financial implications that couples should understand. Property titling dictates ownership rights, responsibilities, and how the asset is treated in future events like divorce or death.

Understanding Property Titling for Married Couples

Property ownership for married couples is governed by state laws, falling under either a community property or common law system. In community property states (nine states), assets acquired during marriage are considered jointly owned. Common law states generally base ownership on whose name is on the title or who purchased it.

Couples can title property in several ways. Tenancy by the Entirety (TBE) is an ownership form exclusively for married couples in certain states, treating them as a single legal entity. TBE includes a right of survivorship; if one spouse dies, full ownership automatically transfers to the survivor without probate. This form often protects against creditors of an individual spouse.

Joint Tenancy with Right of Survivorship (JTWROS) is another common titling method, available to any two or more individuals. Like TBE, JTWROS includes a right of survivorship, ensuring the deceased owner’s interest passes to the surviving joint tenant(s). However, JTWROS typically offers less protection from individual debts than Tenancy by the Entirety.

Tenancy in Common (TIC) allows two or more people to own distinct, proportionate, and potentially unequal shares. Unlike TBE or JTWROS, there is no right of survivorship with TIC. Upon an owner’s death, their share passes to their estate, distributed according to their will or state intestacy laws. Each co-owner can transfer their share independently.

Implications of Single-Name Property Ownership

Titling a home in only one spouse’s name has legal and financial implications. Even if one spouse is not on the deed, the non-titled spouse may still possess significant legal rights, particularly in community property states where assets acquired during marriage are considered jointly owned. Many states apply equitable distribution principles in divorce, meaning marital property, regardless of title, is subject to fair division based on various factors, including each spouse’s contributions.

In divorce, a property titled in one spouse’s name may still be considered marital property if acquired during the marriage, subjecting it to division. Courts often consider both financial and non-financial contributions when determining equitable distribution. If the titled spouse dies, the property typically becomes part of their estate and may be subject to probate, a lengthy and costly legal process. Without a will, state intestacy laws determine inheritance, and the non-titled surviving spouse may receive only a portion, especially if there are children from a previous relationship.

From a financial perspective, titling a property in one spouse’s name affects mortgage qualification. Lenders typically consider only the titled spouse’s income, credit score, and debt-to-income ratio for the loan application. This can limit the mortgage amount or impact interest rates if the titled spouse has lower income or less favorable credit history than both combined. The non-titled spouse’s credit history is generally not directly impacted by mortgage payments.

Tax implications also vary with single-name ownership. The mortgage interest deduction allows homeowners to reduce taxable income, with limits up to $750,000 of qualified mortgage debt for married couples filing jointly, or $375,000 for those filing separately. Property tax deductions are capped at $10,000 annually for married couples filing jointly, or $5,000 for those filing separately, and are generally claimed by the person who pays them or the titled owner. When selling a primary residence, married couples filing jointly can exclude up to $500,000 of capital gains from taxation, while single filers or those married filing separately can exclude up to $250,000 per person, provided they meet ownership and use tests. Even if only one spouse is on the deed, the full $500,000 capital gains exclusion can apply if both spouses lived in the home as their primary residence and file jointly.

Making the Decision

Deciding whether to title a property in one spouse’s name involves considering the couple’s individual financial standing. If one spouse has a significantly higher credit score, more stable income, or less existing debt, titling the property and mortgage in their name might facilitate loan approval or secure more favorable interest rates. This strategy is useful if the other spouse has credit challenges or liabilities that could hinder mortgage qualification.

Estate planning is important when determining property titling. The chosen ownership structure directly influences how the property transfers upon death and whether it bypasses probate. Titling can impact wills and trusts, as certain joint ownership forms with rights of survivorship supersede will provisions.

Prenuptial or postnuptial agreements can also play a role in property titling decisions. These legal documents allow couples to define separate and marital property, regardless of how the title is held, and can predetermine asset distribution in divorce or death. Such agreements provide clarity and can protect individual assets.

Consider future plans like refinancing, selling the property, or separation. The ease or complexity of these future transactions can be affected by how the property is currently titled. Given state law variations, consult legal and financial professionals, such as a real estate attorney, financial advisor, or tax professional, before making a final decision.