How De Factor Couples Divide Property Under Australian Law?

In Australia, de facto relationships are recognised under family law in much the same way as marriages when it comes to property settlements. If a de facto couple separates, the division of assets, liabilities, and financial resources is guided by principles designed to ensure fairness and equity for both parties. Understanding your rights, the process, and what factors courts consider can help you navigate this often emotionally challenging time.

What is a De Facto Relationship in Australia?

A de facto relationship exists when two people (whether same-sex or opposite-sex) live together on a genuine domestic basis but are not legally married. You may be considered in a de facto relationship if:

You have lived together for at least two years;

• You have a child together;

• You have registered your relationship under state or territory law; or

• One party has made significant contributions to the relationship.

These definitions are important because they determine whether the Family Court can make decisions about property division.

When Can De Facto Couples Seek a Property Settlement?

Under the Family Law Act 1975, de facto couples can apply to the court for property division if:

• The relationship lasted at least two years;

• There’s a child of the relationship;

• One party made substantial contributions, and not making an order would be unjust; or

• The relationship is registered under relevant state or territory law.

It’s important to note that you have two years from the date of separation to make a property settlement application.

What Counts as ‘Property’ in a Settlement?

Property in a de facto property settlement is broadly defined. It includes:

• Real estate

• Bank accounts and cash savings

• Superannuation

• Vehicles, jewellery, and other personal assets

• Investments and shares

• Business interests

• Debts such as mortgages, loans, and credit cards

Everything owned jointly or individually that has financial value can be considered.

How is Property Division Decided?

The court follows a four-step process when determining how property should be divided:

1. Identify and Value the Property Pool

All assets, liabilities, and financial resources are identified and given an agreed or court-determined value.

2. Assess the Contributions of Each Party

Contributions may be:

• Financial – earnings, property brought into the relationship, or inheritances.

• Non-financial – home renovations, managing investments.

• Homemaker/parenting – raising children, running the household.

3. Consider Future Needs

The court examines factors such as:

• Age and health of each party

• Earning capacity

• Care of children

• Financial resources

If one person has significantly greater future needs, the court may adjust the division in their favour.

4. Ensure a Just and Equitable Outcome

The court ensures the final decision is fair in the circumstances.

Reaching an Agreement Without Court

Not all de facto property settlements need to end up in court. Many couples negotiate directly or through mediation, which can save time, reduce stress, and minimise costs. Reaching an agreement can be formalised through:

• Consent Orders – approved by the court and legally binding.

• Binding Financial Agreements – private agreements between the parties that meet strict legal requirements.

If you’re unsure of your entitlements, consulting an experienced Australia family lawyer can ensure you make informed decisions.

What Happens if the Parties Disagree?

If negotiation fails, either party can apply to the Family Court or Federal Circuit and Family Court of Australia for a property order. The court will consider evidence of contributions, needs, and fairness before making a ruling. It’s always best to seek legal advice early to understand the strengths and weaknesses of your case.

Key Time Limits to Remember

The two-year limit after separation is strict. If you miss this deadline, you will need to seek the court’s permission to proceed, which can be difficult to obtain unless there are compelling reasons.

Final Thoughts

Dividing property after a de facto relationship breakdown can be complex, especially when emotions are high and significant assets are involved. Knowing the legal framework, the process, and your rights can help you make better decisions and avoid costly mistakes. For personalised guidance tailored to your circumstances, you can reach out to March On Legal for professional support.