Who gets the house in a divorce? An Australian legal guide

Whether you’re just thinking about separating, or are in the midst of a divorce, you likely have a heap of questions. And one of the biggest is probably, ‘who gets the house in a divorce?’

This is an important consideration. Your family home is likely one of your biggest (if not the biggest) asset you have within your marital property. The question of who gets to stay in the home, and ultimately retain the family home, is a big one.

Recently this issue has been further amplified by the current housing crisis, including the rental crisis, which makes finding suitable and affordable housing more difficult than ever.

So, what does the law say about who gets the house in a divorce in Australia? Let’s find out. 

What does the Family Law Act say?

There’s no set and go formula under The Family Law Act 1975 (Cth) (the Family Law Act) to decide who gets the house in a divorce in Australia. Instead, the family home becomes part of the overall relationship property pool. This is then divided as part of a property settlement (which is separate to the divorce itself).

The property settlement also has no set formula. Every situation is decided on its own unique merits. In many cases ex-spouses will negotiate on how to divide their property, including who will retain the family home. This is generally a more affordable outcome. If you’re able to come to a property division agreement, great. But you’ll also want to have this agreement set out in a binding financial agreement to make it enforceable (our team can help with that!). 

If you aren’t able to come to an agreement with your ex, then you’ll need to go to the Family Court for final consent orders which will divide your property. It’s important to recognise that this is an entirely separate process from getting a divorce order. You can get a divorce order (and even remarry!) without a property settlement, and vice versa.

What factors will the Court consider when determining how the marital property will be divided

If you do need to go to the Family Court for final consent orders for the division of your marital property, there are some factors that they will consider in order to divide property fairly. 

1. Assets and liabilities

The Court will first look at all the assets and liabilities of you and your ex-partner both individually and together. In other words, they’ll look at what you own and what you owe, and what each is worth. This gives them the baseline for the division of property as they understand what they’re working with. Of course, your family home will certainly be a major part of this tallying of assets and liabilities. 

2. Financial and non-financial contributions to the relationship

The Court will also consider all your individual contributions to the relationship property. This includes both financial and non-financial contributions.

Examples of financial contributions could be income earned, real property that was purchased prior to the relationship and brought into the relationship and superannuation. Examples of non-financial contributions could be raising children, domestic duties in the home and support provided to the other spouse during education or career progression.

3. The duration of the marriage

The length of the marriage will impact on how assets are divided. A longer marriage may mean that assets are more integrated and the assets originally ‘brought into’ the relationship might be treated differently than with a relatively short marriage.

This can sometimes complicate the separation. Or, in the case of a very long marriage, make the division of property quite simple as it could contribute to a more direct split of the main assets, including the family home.  

4. Financial impact of the divorce

The Court will also consider the economic impact of the divorce on each party. If one party will be substantially less financially secure than the other party immediately after divorce, they’ll likely take this into account and adjust the property division.

5. Future needs of each party

The Court will always consider the future needs of both parties. For example, one party may take on greater childcare, which impacts their earning capacity and their living costs. This would be factored into the ultimate division. Likewise, if one party is unwell or has bad health, this will also be factored into the ultimate decision on how to divide the property.

Who gets the house in a divorce may be impacted by who needs the house – for example if you’re the parent who keeps primary custody of the children. The Court’s goal is to ensure that everyone is treated equitably.

6. Just and equitable

Lastly, the Court will consider whether the property settlement is just and equitable considering all the circumstances. If not, they’ll adjust the settlement to ensure that it is, including, who gets the house after a divorce.

Who gets the investment property/rental house in a divorce?

Any investment rental properties will be treated like any other assets in your marriage – they’ll become part of the relationship property pool. As part of the property pool, the asset will be divided according to the factors above. 

But if you decide to retain a rental property, if it is transferred to you, it may trigger tax consequences, alternatively, if you both remain listed as legal owners of the property, then any income you make from the property will need to be divided between the two of you. It’s important to have any arrangement of this sort stated in a binding financial agreement or court order  so that you’ll be able to enforce your rights in the future.

Legal advice will help!

If you’re considering separating, or are in the midst of a separation, and you’re concerned about who will get the house in a divorce, get in touch with our team. The actual division of property, including your family home, depends on many factors. But our team can help you understand the process of property division and get tailored legal advice that will get you the best outcomes for your situation.

Request a call back from our friendly supportive team via the form below, or feel free to simply call us directly.