Until there’s a legally binding property settlement in place, your finances are still linked with your ex-partner following a separation. We highly recommend seeking legal advice as soon as you separate, so you can start planning for your future and take the first steps to moving forward in your life.
In a property settlement, a house or property is typically the biggest asset a couple share, both financially and sentimentally. Because of this, it’s often the most complex and emotionally challenging part of any separation.
What is a property transfer?
A property transfer involves changing the ownership of a property from one party to another. For example, one spouse may retain the family home while compensating the other through financial or asset adjustments.
While some separating couples choose to sell their shared home and split the profits, others may decide to keep the property to provide stability, especially when children are involved.
What are the steps involved in property transfers as a result of separation?
- Value the property
Determine the value of the property using an independent valuator to check you’re working with the current market value. - Consider your financial capacity
While retaining the family home may provide stability for you and your children, consider whether you can manage the long-term costs, such as mortgage payments, maintenance and rates. If you are considering taking full ownership of the home, you will also need to check to see if you qualify for a loan. - Reach an agreement (and formalise it)
Both parties must agree on how to divide the property. This can be done through mediation, with the help of trusted and experienced lawyers, such as Waters Lawyers, or through the court. No matter how the agreement takes place, it must be formalised through a consent order or a Binding Financial Agreement (BFA) to ensure it is legally binding. - Prepare and lodge the transfer documents
Once the agreement is formalised, a lawyer and/or conveyancer must draft the necessary documents for the transfer. If the property still has a mortgage, the party retaining ownership will likely need to refinance the loan in their name as to release their ex-spouse from financial liability.If you engage the help of Waters Lawyers with us, we’ll ensure all necessary documentation is prepared and lodged on your behalf (and we have a conveyancer on our team, too).
Will I need to pay stamp duty?
No, as long as you have a formal agreement. Property transfers resulting from a relationship breakdown are exempt from stamp duty as long as the necessary legal documentation is provided during the transfer lodgement. Another reason why formalising the property transfer is important!
I’m in a long-term de facto relationship, but the house isn’t in my name. What can I do?
You may be entitled to a share of the house after a separation if you have been in a genuine de facto relationship as outlined by the court (see here to find out), even if your name isn’t on the property title. The same applies to other assets and liabilities held by either party. However, every relationship is unique and outcomes vary greatly, so seeking tailored legal advice before navigating this situation is highly recommended!
What if my ex-partner and I don’t engage the help of lawyers?
Serious short- and long-term consequences can come from failing to seek expert legal advice following a separation, delaying your ability to reach financial freedom and move forward with your life. Beyond the risk of stamp duty payments as mentioned above, the absence of legally binding documentation means your ex-partner can challenge a property transfer (or other asset pool divisions) in the future and put your ownership at risk.
Don’t forget to update your Will
If your former spouse is still a beneficiary in your Will, they may still inherit the property or other assets following your passing. If this isn’t your intention, it’s essential you update your Will when the property transfer is complete.
As specialists in both family law and conveyancing, we handle every step of the process to ensure a seamless experience and reduce unnecessary stress. For a free and non-obligational consultation, contact us today via our website or by calling 5996 1600.
