Detailed answer

Short answer: Possibly. Under New Mexico law, a court that divides the proceeds from the sale of real estate can consider who paid mortgage principal, property taxes, insurance, utilities, maintenance and other carrying costs when it determines each party’s fair share. Whether you can actually recover those payments as a direct credit against sale proceeds depends on the legal context (for example, divorce/property division versus co‑owner disputes), the source of the funds used to pay the costs (separate funds vs. marital/community funds), and whether the payments preserved or increased the property’s value.

Legal framework (what the law says)

New Mexico follows equitable distribution principles when dividing property in a marriage dissolution. The court determines a fair division of marital assets and debts considering many factors. The general statute that governs property division in divorce proceedings is part of New Mexico’s family law code (see statutes on disposition of property). You can search New Mexico statutes here: https://www.nmlegis.gov/Legislation/Statutes. The court may award reimbursements or credits to a spouse who used separate funds to pay for the property, or who made payments that preserved its value.

Key points courts look at

• Source of payments: Payments from separate (nonmarital) funds are more likely to justify a credit or reimbursement than payments made from marital funds.
• Type of payment: Principal mortgage payments increase equity and are treated differently from interest and carrying costs (interest, taxes, insurance, utilities), which are generally considered maintenance or carrying expenses.
• Preservation or improvement: Payments that preserve or increase property value (necessary repairs, mortgage principal that builds equity) are more likely to be credited than pure consumption expenses.
• Agreement or accounting: Written agreements between owners or a clear accounting of contributions make it easier to get a credit.
• Timing: Who paid during marriage versus after separation can change the analysis, especially if contributions after separation were made while the property was being maintained for one party’s benefit.

Typical outcomes

Below are common ways courts or parties resolve claims for carrying costs:

• Credit for principal paid: If one person paid mortgage principal with separate funds, courts commonly give a dollar-for-dollar credit or reimbursement for that principal contribution toward the sale proceeds.
• Reimbursement for necessary costs that preserved value: Reasonable payments for repairs or property taxes that preserved the property’s value may be reimbursed or credited.
• Limited credit for interest and routine carrying costs: Interest, utilities, and insurance are often treated as ongoing expenses rather than contributions to equity. Courts may decline full reimbursement for these, though they sometimes consider them in the overall equitable division.
• Offsetting claims: A court can offset claims — for example, one spouse’s mortgage payments might be balanced against the other spouse’s contributions (childcare, household bills, or payments toward other debts).
• Settlement negotiation: Parties commonly negotiate credits for documented carrying costs instead of asking the court to decide—this often saves time and expense.

Example hypotheticals

These examples illustrate how courts or parties typically treat different payments:

• Example A — Principal paid with separate funds: Spouse A used inheritance funds (clearly separate property) to pay $30,000 of principal. The court is likely to award Spouse A a reimbursement or credit for that $30,000 against the sale proceeds.
• Example B — Mortgage and taxes paid from marital account: Both spouses used the joint checking account to pay mortgage interest and property taxes. The court may conclude those were marital expenses and divide the net proceeds equitably without a special credit.
• Example C — After separation, one spouse pays maintenance: After separation, Spouse B continued to pay mortgage, taxes, and insurance to protect the house until sale. The court may treat those payments as preservative and award a credit, particularly if the other spouse had the opportunity to contribute but did not.

How to present a claim for your payments

1. Keep documentation: mortgage statements showing principal vs. interest, canceled checks, bank records, tax receipts, insurance invoices, and receipts for repairs.
2. Separate and total principal vs. interest: identify the principal portion of mortgage payments—this equates to equity built—and list carrying costs separately (taxes, insurance, utilities).
3. Show the source of funds: evidence that payments came from separate accounts (inheritance, pre-marriage savings) matters.
4. Include claims early: raise reimbursement or credit claims in pleadings (answer, counterclaim, or settlement proposal) so the court can consider them.

Other contexts — co-owners, heirs, or non‑divorce sales

If the property sale occurs outside divorce (for example, co-owners or estate distributions), state contract, trust, or partition law controls. Many of the same principles apply: courts or arbitrators often award reimbursement for contributions that preserved or increased value and treat routine carrying costs differently from equity-building payments.

Tax and practical considerations

Be aware of tax consequences: proceeds, capital gains treatment, and the tax basis can be affected by who paid improvements or principal. Consult a tax advisor about how reimbursements or credits may affect your tax obligations before finalizing a settlement.

Where to look in New Mexico law

New Mexico property-division law appears in the statutes governing family law and divorce. Search New Mexico statutes and look for sections on disposition of property and factors for property division via the New Mexico Legislature site: https://www.nmlegis.gov/Legislation/Statutes. You can also find practical information and forms through New Mexico courts at https://www.nmcourts.gov.

Important: This explanation summarizes common outcomes and the general approach under New Mexico’s equitable distribution framework. Specific results vary by case facts and judicial discretion.

Disclaimer: This is general information, not legal advice. Consult a licensed New Mexico attorney about your situation before making legal decisions.

Helpful Hints

• Document everything: mortgage statements, bank records, receipts for taxes, insurance, utilities, and repairs.
• Separate principal from interest: principal payments increase equity and carry stronger reimbursement arguments.
• Track the source of funds: label deposits and use separate accounts when possible to preserve claims of separate-property contributions.
• Ask for a written accounting: demand an accounting of contributions and expenses before settlement or trial.
• Negotiate credits in writing: settlements save time and let you control the outcome instead of leaving it to a judge.
• Consider temporary orders: if a divorce is pending, request temporary orders to prevent one side from dissipating assets or refusing to pay necessary carrying costs.
• Get tax advice early: reimbursement or credits can affect capital gains and basis—ask a CPA or tax attorney.
• Consult a New Mexico attorney: an attorney can calculate equitable credits, draft pleadings, and represent your claim effectively.