Ireland is in love with cohabiting. Indeed, couples here have been shacking up together without marrying at a rapidly increasing rate. If you’re saving for a house, or someone is struggling with rent, living together can make financial sense too – just don’t forget to protect yourself.

Upward trend

Since the financial crash, couples here have become a whole lot more enamoured, it might seem. The number of those living together without children rose by 6 per cent between 2011 and 2016, CSO figures show. This increase then almost tripled, with a further 17 per cent rise recorded in Census 2022.

There were almost 80,000 cohabiting couples without children recorded in that census; there were more than 85,000 cohabiting with children. A living arrangement seen as anything from bohemian to deviant a few decades ago is now unremarkable. In a housing and cost-of-living crisis, the home economics can work too.

There are few more significant ways to commit to someone than by sharing a home – just know that mixing property and finances when you’re not married can get tricky.

Saving for a deposit

One in three first-time-buyer homes now exceed €400,000 in value, according to the latest Banking and Payments Federation figures.

These buyers, whose average age is now 36, are having to come up with a €40,000 deposit at least. With national average rents surpassing €2,000 a month, according to Daft.ie, amassing a house deposit as an individual can seem unattainable. Living and saving together as a couple can speed things up.

Committing to the future financial goal of home ownership bodes well for a relationship. An account where savings are combined can give a better return on lump sum deposit accounts or saving accounts. Just make sure the savings account is in joint names, that you both know the account password and have visibility of what’s going in and out, says solicitor Niamh Moran of Carmody Moran solicitors.

“You would be minded to keep a record of what you are putting in, and make sure the money is in joint names. Know the amount, particularly if it has amassed to being a large sum,” says Moran.

If either of you receives a large lump sum, such as redundancy or inheritance money, you could decide to ringfence it in a separate account.

When buying a house together, your solicitor can itemise in a “completion statement” who contributed what. If you split up, or if something happens to your partner, accessing funds in a bank account in their name only could be very difficult.

As a cohabitant, you are not automatically their next of kin.

“There is a move away from marriage. It’s almost thought of as an old-fashioned concept. But marriage does bring certainty. You are potentially in a greyer area with cohabiting; you are not in as solid ground,” says Moran.

If you are living with someone and they die without a will, you have no automatic right to any share of “their” money, no matter how long you have been together.

“Be aware. You are not a married couple, you don’t have automatic entitlement, so in the event of a break-up or a death, the situation isn’t entirely clear. So it’s no harm to keep records,” says Moran.

Moving in to ‘your’ place

With rents through the roof, it’s no wonder boyfriends or girlfriends are moving in. If you or your parents own the property, however, know that your love can acquire rights.

Two types of law can apply in this situation, says solicitor Keith Walsh. The first has to do with gaining equity in the property – so if someone moves in and contributes to, or puts money into a property owned by someone else, they can be entitled to get it out, says Walsh.

“If your partner starts to pay the mortgage or contributes substantially to any structural-type repairs or direct costs in the home, they could be establishing some sort of equity interest in it,” he says.

If, for example, a parent owns a property, and their daughter takes on the mortgage, she is gaining an interest in the property. If her partner puts money into the couple’s joint account and that account is paying the mortgage, that potentially gives the partner an equitable interest in the property, says Walsh.

If money is being paid towards the home, it’s important to say that the purpose of the money is rent, he says. “They can pay as much rent as they like and they are never going to acquire an interest in the property,” says Walsh. However, the rent is taxable, he says.

Indirect contributions of labour or money towards renovation of the property can also count in a claim for equity in the property, says Moran.

Financial dependence

Where one cohabiting partner is financially dependent on the other, they can also make a claim for redress. This redress scheme is to protect financially dependent cohabitants should the relationship end due to a break-up or death.

To qualify, you must have been living together with a partner in an intimate and committed relationship for at least five years, or two years if you have a child, and be financially dependent on them.

Most cohabitants working without children are not going to be financially dependent on each other, says Walsh.

“You could argue, however, if you are staying in a property owned by your partner’s parents, not paying rent, and you have forgone chances to buy a house, that you are financially dependent because you are getting free accommodation as part of the relationship,” he says.

Having other housemates living in the home doesn’t diminish the intimate and committed nature of your relationship either.

Redress for cohabitants isn’t automatic, however; you have to apply to the court, proving you are a financially dependent cohabitant. Those claiming redress must apply within two years of the breakdown of the relationship, or within six months of the grant of probate issuing where the cohabitant has died.

Cohabitation agreement

If you live together as partners and you do not intend to marry, you can protect your financial interests by entering into a “cohabitation agreement”.

This is where couples agree to opt out of the right to make a redress claim against each other.

“You are opting out of the redress scheme under the 2010 Cohabitants Act; you are waving those rights, basically,” says Moran. “Quite often, [living arrangements] can develop into something much longer than anyone had intended.”

A cohabitants’ agreement can specify how you plan to separate your assets should the relationship come to an end. This way, you can agree what happens while things are amicable.

“If you are bringing another person into a property that is yours, or has been in your family, signing a cohabitation agreement would be highly advisable,” she says.

It’s not very romantic, but by signing this agreement at the outset, your beloved is agreeing not to make a claim on the property where you live.

For the cohabitants’ agreement to be valid and enforceable by the court, you must both get independent legal advice, and both of you must sign the agreement.

“By having everything down in black and white, these agreements don’t tend to trouble the courts because everyone knows where they stand. If you enter into something very clearly, it does diminish the chances for dispute,” says Moran. “I know those are very difficult conversations to have, but they are worthwhile having.”

The difficulty can be that people fall into living together without anticipating the long-term consequences.

Inheritance implications

Cohabitants should know that if one of you dies without a will, you have no automatic right to any share of the other’s property, money or possessions – no matter how long you have been together.

Even if your partner has made a will, you will pay Capital Acquisitions Tax (CAT) at 33 per cent on gifts or inheritance over €16,250. Had you married, you would be automatically entitled to your spouse’s whole estate, tax-free if there was no will, or two thirds of it if there was no will and they had children.

Cohabitants should know that being in a long-term, committed relationship where you are not married means that the surviving partner can pay significantly more inheritance tax if the other dies.

Thinking of breaking up?

If you’ve been living together, you want to break up and you are worried about your blended finances, take legal advice before pulling the plug, says Moran.

“Sit down and look at it with someone impartially and plan for what might happen,” she says.

If you have difficulty agreeing who is owed what, mediation will be less costly than legal proceedings. Couples can mitigate disputes by being clear-headed before they move in.

“I see these things when they get contentious. It causes stress and upset and takes time to resolve,” says Moran. “The best thing is to deal with it at the outset and not let yourself drift into a situation because problems do arise.”