diff --git a/lib/Folder/FolderManager.php b/lib/Folder/FolderManager.php
index 3335b70c9..8c7bdda82 100644
--- a/lib/Folder/FolderManager.php
+++ b/lib/Folder/FolderManager.php
@@ -18,6 +18,7 @@
 use OCA\GroupFolders\ACL\UserMapping\IUserMapping;
 use OCA\GroupFolders\ACL\UserMapping\IUserMappingManager;
 use OCA\GroupFolders\ACL\UserMapping\UserMapping;
+use OCA\GroupFolders\AppInfo\Application;
 use OCA\GroupFolders\Mount\FolderStorageManager;
 use OCA\GroupFolders\Mount\GroupMountPoint;
 use OCA\GroupFolders\ResponseDefinitions;
@@ -29,6 +30,7 @@
 use OCP\Files\FileInfo;
 use OCP\Files\IMimeTypeLoader;
 use OCP\Files\IRootFolder;
+use OCP\IAppConfig;
 use OCP\IConfig;
 use OCP\IDBConnection;
 use OCP\IGroup;
@@ -64,6 +66,7 @@ public function __construct(
 		private readonly IConfig $config,
 		private readonly IUserMappingManager $userMappingManager,
 		private readonly FolderStorageManager $folderStorageManager,
+		private readonly IAppConfig $appConfig,
 	) {
 	}
 
@@ -679,6 +682,8 @@ public function createFolder(string $mountPoint): int {
 
 		$this->eventDispatcher->dispatchTyped(new CriticalActionPerformedEvent('A new groupfolder "%s" was created with id %d', [$mountPoint, $id]));
 
+		$this->updateOverwriteHomeFolders();
+
 		return $id;
 	}
 
@@ -790,6 +795,8 @@ public function removeFolder(int $folderId): void {
 		$query->executeStatement();
 
 		$this->eventDispatcher->dispatchTyped(new CriticalActionPerformedEvent('The groupfolder with id %d was removed', [$folderId]));
+
+		$this->updateOverwriteHomeFolders();
 	}
 
 	/**
@@ -818,6 +825,8 @@ public function renameFolder(int $folderId, string $newMountPoint): void {
 		$query->executeStatement();
 
 		$this->eventDispatcher->dispatchTyped(new CriticalActionPerformedEvent('The groupfolder with id %d was renamed to "%s"', [$folderId, $newMountPoint]));
+
+		$this->updateOverwriteHomeFolders();
 	}
 
 	/**
@@ -983,4 +992,33 @@ private function getRealQuota(int $quota): int {
 
 		return $quota;
 	}
+
+	/**
+	 * Check if any mountpoint is configured that overwrite the home folder
+	 */
+	private function hasHomeFolderOverwriteMount(): bool {
+		$builder = $this->connection->getQueryBuilder();
+		$query = $builder->select('folder_id')
+			->from('group_folders')
+			->where($builder->expr()->eq('mount_point', $builder->createNamedParameter('/')))
+			->setMaxResults(1);
+		$result = $query->executeQuery();
+		return $result->rowCount() > 0;
+	}
+
+	public function updateOverwriteHomeFolders(): void {
+		$appIdsList = $this->appConfig->getValueArray('files', 'overwrites_home_folders');
+
+		if ($this->hasHomeFolderOverwriteMount()) {
+			if (!in_array(Application::APP_ID, $appIdsList)) {
+				$appIdsList[] = Application::APP_ID;
+				$this->appConfig->setValueArray('files', 'overwrites_home_folders', $appIdsList);
+			}
+		} else {
+			if (in_array(Application::APP_ID, $appIdsList)) {
+				$appIdsList = array_values(array_filter($appIdsList, fn ($v) => $v !== Application::APP_ID));
+				$this->appConfig->setValueArray('files', 'overwrites_home_folders', $appIdsList);
+			}
+		}
+	}
 }
diff --git a/lib/Migration/Version21000Date20250925152053.php b/lib/Migration/Version21000Date20250925152053.php
new file mode 100644
index 000000000..5c1a96d6f
--- /dev/null
+++ b/lib/Migration/Version21000Date20250925152053.php
@@ -0,0 +1,37 @@
+<?php
+
+declare(strict_types=1);
+
+/**
+ * SPDX-FileCopyrightText: 2025 Nextcloud GmbH and Nextcloud contributors
+ * SPDX-License-Identifier: AGPL-3.0-or-later
+ */
+
+namespace OCA\GroupFolders\Migration;
+
+use Closure;
+use OCA\GroupFolders\Folder\FolderManager;
+use OCP\DB\ISchemaWrapper;
+use OCP\IAppConfig;
+use OCP\Migration\IOutput;
+use OCP\Migration\SimpleMigrationStep;
+use Override;
+
+/**
+ * FIXME Auto-generated migration step: Please modify to your needs!
+ */
+class Version21000Date20250925152053 extends SimpleMigrationStep {
+	public function __construct(
+		private FolderManager $folderManager,
+		private IAppConfig $appConfig,
+	) {
+	}
+
+	/**
+	 * @param Closure(): ISchemaWrapper $schemaClosure
+	 */
+	#[Override]
+	public function postSchemaChange(IOutput $output, Closure $schemaClosure, array $options): void {
+		$this->folderManager->updateOverwriteHomeFolders();
+	}
+}
diff --git a/tests/Folder/FolderManagerTest.php b/tests/Folder/FolderManagerTest.php
index 6d8ba943d..e644facb8 100644
--- a/tests/Folder/FolderManagerTest.php
+++ b/tests/Folder/FolderManagerTest.php
@@ -19,6 +19,7 @@
 use OCP\EventDispatcher\IEventDispatcher;
 use OCP\Files\FileInfo;
 use OCP\Files\IMimeTypeLoader;
+use OCP\IAppConfig;
 use OCP\IConfig;
 use OCP\IDBConnection;
 use OCP\IGroupManager;
@@ -42,6 +43,7 @@ class FolderManagerTest extends TestCase {
 	private IConfig&MockObject $config;
 	private IUserMappingManager&MockObject $userMappingManager;
 	private FolderStorageManager $folderStorageManager;
+	private IAppConfig $appConfig;
 
 	protected function setUp(): void {
 		parent::setUp();
@@ -52,7 +54,9 @@ protected function setUp(): void {
 		$this->eventDispatcher = $this->createMock(IEventDispatcher::class);
 		$this->config = $this->createMock(IConfig::class);
 		$this->userMappingManager = $this->createMock(IUserMappingManager::class);
+		$this->userMappingManager = $this->createMock(IUserMappingManager::class);
 		$this->folderStorageManager = Server::get(FolderStorageManager::class);
+		$this->appConfig = Server::get(IAppConfig::class);
 
 		$this->manager = new FolderManager(
 			Server::get(IDBConnection::class),
@@ -63,6 +67,7 @@ protected function setUp(): void {
 			$this->config,
 			$this->userMappingManager,
 			$this->folderStorageManager,
+			$this->appConfig,
 		);
 		$this->clean();
 	}
@@ -363,7 +368,7 @@ public function testGetFoldersForUserEmpty(): void {
 	public function testGetFoldersForUserSimple(): void {
 		$db = $this->createMock(IDBConnection::class);
 		$manager = $this->getMockBuilder(FolderManager::class)
-			->setConstructorArgs([$db, $this->groupManager, $this->mimeLoader, $this->logger, $this->eventDispatcher, $this->config, $this->userMappingManager, $this->folderStorageManager])
+			->setConstructorArgs([$db, $this->groupManager, $this->mimeLoader, $this->logger, $this->eventDispatcher, $this->config, $this->userMappingManager, $this->folderStorageManager, $this->appConfig])
 			->onlyMethods(['getFoldersForGroups'])
 			->getMock();
 
@@ -392,7 +397,7 @@ public function testGetFoldersForUserSimple(): void {
 	public function testGetFoldersForUserMerge(): void {
 		$db = $this->createMock(IDBConnection::class);
 		$manager = $this->getMockBuilder(FolderManager::class)
-			->setConstructorArgs([$db, $this->groupManager, $this->mimeLoader, $this->logger, $this->eventDispatcher, $this->config, $this->userMappingManager, $this->folderStorageManager])
+			->setConstructorArgs([$db, $this->groupManager, $this->mimeLoader, $this->logger, $this->eventDispatcher, $this->config, $this->userMappingManager, $this->folderStorageManager, $this->appConfig])
 			->onlyMethods(['getFoldersForGroups'])
 			->getMock();
 
@@ -443,7 +448,7 @@ public function testGetFoldersForUserMerge(): void {
 	public function testGetFolderPermissionsForUserMerge(): void {
 		$db = $this->createMock(IDBConnection::class);
 		$manager = $this->getMockBuilder(FolderManager::class)
-			->setConstructorArgs([$db, $this->groupManager, $this->mimeLoader, $this->logger, $this->eventDispatcher, $this->config, $this->userMappingManager, $this->folderStorageManager])
+			->setConstructorArgs([$db, $this->groupManager, $this->mimeLoader, $this->logger, $this->eventDispatcher, $this->config, $this->userMappingManager, $this->folderStorageManager, $this->appConfig])
 			->onlyMethods(['getFoldersForGroups'])
 			->getMock();