Codification Dilemmas Concerning Family Law

During the codification process, a significant question arose: whether family law should be incorporated into the new Civil Code or regulated by a separate statute. The codification of private law into a unified code is consistent with the civil law traditions of continental Europe (e.g. the German and Austrian models), and therefore integrating family law into the Civil Code offers systematic advantages; a single, coherent statute promotes consistent judicial application and reduces interpretative uncertainty. At the same time, family law is rooted in emotional, biological and cohabitation-based relationships between individuals and does not approach these relationships primarily through property-law categories, unlike other parts of the Civil Code. Furthermore, the regulation of family life is particularly sensitive to social change (e.g. cohabitation, the status of children, adoption), which may call for more flexible and independent legislation than what the structure of the Civil Code permits.

Cohabitation and Its Property Law Consequences

The Civil Code defines a cohabitation as an emotional and economic community between two natural persons living in the same household, provided that they are not related in a direct line or as siblings, and that neither of them has an existing marital, registered partnership or cohabitation relationship with another person. This definition may, however, give rise to complex factual situations. A notable example is Decision No. 291 of the Curia, in which the central issue was whether, following the dissolution of a marriage, a subsequent cohabitation could establish a new joint acquisition regime and whether the rules applicable to cohabiting partners should again apply. The Curia held that a cohabitation formed after the dissolution of a marriage cannot be regarded as a continuation of the former marital relationship. Consequently, the property law consequences also follow this distinction, and from the termination of the marital community onwards, the rules of a separate cohabitation apply.

Residential Use Upon Termination of Cohabitation

With regard to the use of the shared residence, the general rule is that a dwelling used during cohabitation does not automatically become jointly owned, even where the partners have lived together for an extended period. In such cases, the determining factor is the legal title under which the property is occupied (e.g. ownership or leasehold). The most common scenario is that the dwelling is occupied on the basis of one partner’s exclusive title. In a residential lease, there is usually no contractual intent between the landlord and the cohabiting partner of the tenant. As a result, upon termination of the cohabitation, the partner without legal title becomes an occupant without title. Unlike in marriage, this does not grant an automatic right of use. However, the parties may settle the matter by mutual agreement, or the court may allocate use on the basis of equitable judicial discretion. In doing so, the court considers the duration of the relationship (a minimum of one year of cohabitation), the presence of a minor child, the absence of alternative accommodation, and the extent of the party’s financial contributions to the maintenance or improvement of the property.

Relationship Between Residential Use and Division of Assets

It is essential to highlight that the allocation of residential use and the division of assets are distinct legal institutions, although closely interconnected. Financial contributions to the dwelling (e.g. renovation or maintenance costs) may form the basis for a claim for division of assets but do not, in themselves, create a right of residential use. Claims for the division of the increase in assets acquired during cohabitation must be adjudicated prior to determining residential use, as the allocation of residential use presupposes the existence of an exclusive or joint legal title. Therefore, the division of the increase in assets becomes a preliminary question for resolving residential use.

Prudent Asset Planning in Cohabitation

The disputes outlined above can be avoided with adequate foresight. The Civil Code’s underlying concept of the individual is rooted in Roman law, expressing the expectation that a “good head of household” acts with due care (bonus pater familias diligentiam adhibere debet). This principle is reflected throughout modern Hungarian private law, whose general clause is built on the expectation of careful and deliberate conduct.

The same principle underlies the rule in Section 6:515 of the Civil Code, which allows parties to conclude a property agreement between cohabiting partners. Entering into such a contract represents a conscious and preventive measure. Cohabitation, no matter how intimate or based on mutual trust, is not free from the risk of future legal disputes, particularly where partners manage finances jointly, live together in real property over an extended period, or raise children together. Since cohabiting partners do not enjoy the statutory protections afforded to spouses, their financial security depends to a greater extent on their own foresight. The property agreement thus offers a proactive tool enabling partners to regulate their property relations at the outset of the relationship, rather than being compelled to address these issues once the relationship becomes strained or ends.

Section 6:515 of the Civil Code expressly allows cohabiting partners to determine, by contract, how they intend to divide assets acquired during their relationship. The parties may freely stipulate the applicable property regime: they may maintain the principle of separate property, create a specific form of joint property, or model their arrangements on the marital community of property. The contract must meet strict formal requirements: it is valid only if executed in a public deed (e.g. before a notary public) or in a private deed countersigned by an attorney. Such agreements may be registered in a public register, enhancing their evidentiary value.

The Property Agreement as a Source of Predictability

Conscious legal planning is especially important because, upon the dissolution of a cohabitation, courts must reconstruct the parties’ joint financial management, their respective contributions, and their intent regarding the transformation of assets into joint property—often retrospectively. This process is not only legally complex but also emotionally burdensome. By contrast, a property agreement provides a clear and predictable framework: the parties may agree in advance, for instance, on the division ratio of a property’s value, which partner may continue to use the shared dwelling after separation, or what happens if one partner makes significant financial investments into property owned by the other.

Such agreements are particularly beneficial where one partner’s contributions are not immediately visible but nonetheless long-term and substantial—for example, where a partner manages the household or cares for children, while the other directs their income toward the parties’ shared financial goals. A property agreement can serve to balance the position of the partner whose contributions are otherwise less quantifiable.

Conclusion

Proactive contracting is therefore not a sign of distrust but evidence of responsible decision-making between the partners. From a legal perspective, it provides predictability; from a personal perspective, it can be liberating for the relationship, as it reduces uncertainty and strengthens mutual trust. When partners consciously and transparently set out in writing how they intend to manage assets acquired during their cohabitation, they not only prevent potential litigation but also promote the stability of their relationship.

Divorce can raise significant questions not only in personal life but also regarding the future of a business. This is particularly true when one spouse owns a company or when the spouses have built a business together during their marriage. In such cases, an important question arises: if the company is registered in only one spouse’s name, can the other spouse claim a share of its value?

The answer depends on several factors, including when and how the business interest was acquired, the period during which the spouses’ marital community of property existed, and whether joint marital assets were used to finance the business.

When transferring a high-value property, the key question is not only under which legal title the property can be acquired, but also what tax or duty consequences arise from the chosen legal arrangement. This is particularly relevant where the acquirer does not fall within the scope of persons exempt from inheritance or gift duty. This raises an important question: which legal arrangement – inheritance, gift, maintenance agreement, inheritance contract or trust – may result in the lowest duty burden?

Notice: This article does not constitute legal advisory services, and does not necessarily match the interpretation of the applicable laws by the authorities. This article is for general information only.

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One of the most common situations giving rise to the greatest number of conflicts during probate proceedings is when the deceased dies without making a testamentary disposition. In such cases, the fate of the assets and debts is determined by the statutory order of succession under the Hungarian Civil Code. Although the rules are clear, a significant proportion of clients are not aware of the more important changes introduced by the Civil Code currently in force, particularly with regard to the rights of the surviving spouse or the extent of the compulsory share.

Under the rules currently in force, the general rate of personal income tax (PIT) is 15 per cent of the tax base. In everyday language, many people lump the different concepts together and simply call every case in which no tax is deducted from their gross salary a “tax exemption.” From a legal-dogmatic perspective, however, classical tax exemption must be sharply distinguished from tax allowances. While tax-exempt revenues do not form part of the tax base in the first place, the tax system also recognises different rules that result in a reduction of the private individual’s tax: these are tax allowances reducing the consolidated tax base.

A particular characteristic of personal income tax is that these tax allowances and tax exemptions may be claimed only against income falling within the consolidated tax base and the tax thereon, and exclusively up to that amount.