Property transfers are among the most complex aspects of divorce and de facto separations. From navigating legal requirements to understanding how it impacts your family, there are many factors to weigh and steps to follow to ensure a smooth, legally binding transfer.
In this guide, we’ll break down the process and highlight the key considerations to help you make informed decisions.
How are assets divided after a separation?
When a couple separates, they must reach an agreement on how their assets will be divided. This applies to both married and de facto relationships and includes assets such as real estate, superannuation and savings. This agreement may be reached between parties on their own or through mediation with lawyers, however it must be formalised through a consent order or Binding Financial Agreement (BFA) for it to be legally binding.
However, if an agreement cannot be reached between the parties, the matter will proceed to court where assets will be divided based on each party’s financial and non-financial contributions during the relationship and their needs beyond it, such as income, health and caregiving responsibilities.
The most valuable asset for many couples if their home, both financially and sentimentally. As such, it is often the part of separation that can be the most complex and emotionally challenging.
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 opt to sell their shared home and split the proceeds, others may decide to keep the property to provide stability and continuity, especially when children are involved.
What are the steps involved in property transfers as a result of separation?
- Evaluate the property
Determine the value of the property using an independent evaluator. This ensures both parties are working with the current market value and is essential for a fair outcome. - Consider your financial capacity
While retaining the family home may provide stability, 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 with your bank first to ensure you qualify for a loan. - Reach an agreement
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. However the agreement takes place, it must be formalised through a consent order or a BFA to ensure it is legally binding. - Prepare and lodge the transfer documents
Once an agreement is formalised, a lawyer and/or conveyancer must draft the necessary documents for the transfer, such as the Section 32. If a property has a mortgage, the party retaining ownership will likely need to refinance the loan in their name, releasing the other party from liability. If you engage the help of Waters Lawyers for a property transfer matter, we will ensure all necessary documentation is prepared and lodged on your behalf.
Will I need to pay stamp duty?
One significant concern during property transfers is the cost of stamp duty. Fortunately, stamp duty exemptions apply for property transfers resulting from a relationship breakdown provided that the transfer is part of a formal family law agreement and legal documentation is provided during the transfer lodgement.
I’m in a long-term de facto relationship, but the house isn’t in my name. What can I do?
If you are in a genuine de facto relationship as outlined by the court (see here to find out), then we go by age old saying: What’s mine is yours and what’s yours is mine. Even if your name isn’t on the property title, you may still be entitled to a share of it after a separation. The same applies to other assets and liabilities held by either party. However, every relationship is unique and outcomes can vary greatly. That’s why we strongly recommend seeking tailored legal advice before navigating these situations.
What if my ex-partner and I don’t engage the help of lawyers?
Failing to seek expert legal advice during a separation can lead to serious short- and long-term consequences. Without legally binding documentation for asset division, you may be required to pay stamp duty on any property you receive. This is a cost that could otherwise be avoided with consent orders or a Binding Financial Agreement.
Additionally, the absence of legally binding documentation leaves the property transfer vulnerable. This lack of security could allow your ex-partner to challenge the transfer in the future, putting your ownership at risk.
Don’t forget to update your Will
Once a property transfer is complete, it’s essential to update your Will. If your former spouse remains a beneficiary, they may still inherit the property or other assets. Ensure your Will reflects your new circumstances and don’t overlook related documents, such as superannuation death benefit nominations.
Navigating property transfers during divorce or de facto separation can be overwhelming, but you don’t have to face it alone. At Waters Lawyers, we provide expert legal and conveyancing advice with compassion, honesty and transparency. 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. Whether it’s property transfers, Wills or other family law matters, we’re here to help you move forward with clarity and confidence.
