The family home does not automatically have to be sold after separation. We explain what can happen to the house, including selling, refinancing, transferring it to one person or delaying a sale.
For many separating couples, the family home is their largest asset. Sometimes it represents most of their net wealth.
One of the first questions after separation is therefore: what happens to the house?
Does one person get to keep it? Does it have to be sold? Can one person buy the other out? Does it matter whose name is on the title? And what happens if the children are still living there?
There is no automatic rule that the family home must be sold or divided equally after separation.
What happens to it depends on the overall property settlement.
After separation, the family home can be sold, transferred to one party as part of the property settlement or, in some circumstances, retained for a period before being sold.
Neither person automatically gets the house, even if it is registered in their name.
The home is considered as part of the parties' overall financial circumstances. This includes their other assets and liabilities, contributions during the relationship and their current and future circumstances.
If one person wants to keep the home, they will usually need to be able to refinance the mortgage and fund any payment required to the other party.
No.
Selling the family home is only one possible outcome.
Broadly, there are three possibilities:
Which option is realistic depends on the financial circumstances of the parties and the overall property settlement.
For example, keeping the family home may make sense where children are settled there and one parent can afford to refinance it.
It may not be realistic if neither person can service the mortgage independently or if retaining the property would leave insufficient assets to achieve an appropriate overall settlement.
Not necessarily.
An asset is not automatically excluded from a property settlement simply because it is registered in one person's name.
A house owned solely by one spouse or de facto partner can still be relevant to the property settlement.
Similarly, owning 50 per cent of a jointly held property does not automatically mean each person will ultimately receive 50 per cent of the overall property pool.
Legal ownership is relevant, particularly when dealing with the property before settlement, but it does not determine the final family law outcome by itself.
The Family Law Act 1975 (Cth) does not prescribe a fixed percentage or mathematical formula.
The Court considers the parties' financial circumstances as a whole before deciding whether property orders should be made and what orders are appropriate.
In practical terms, this involves:
The same principles inform negotiations where the parties are trying to reach their own agreement without asking a judge to determine the outcome.
The family home is rarely considered on its own.
The parties' broader financial position may include:
Liabilities can include mortgages, personal loans, credit cards, tax liabilities and business debts.
The parties generally need to provide financial disclosure so that the property pool can be properly identified and valued.
Separation also does not simply freeze the property pool on the date the relationship ended.
The parties' financial circumstances at the time the property matter is resolved are relevant, although when and how a particular asset or liability arose can be important to the way it is ultimately treated.
Once the parties' property and liabilities have been identified, their contributions are considered.
Financial contributions can include:
The Court also considers non-financial contributions and contributions to the welfare of the family.
These can include caring for children, homemaking, maintaining or improving property and unpaid work in a family business.
There is no rule that the person who earned more money during the relationship is therefore entitled to more of the property.
There is also no rule that every contribution has the same value. Contributions are assessed in the context of the particular relationship.
Changes to the Family Law Act dealing with property settlements commenced on 10 June 2025.
Among other things, the legislation now expressly addresses the economic effect of family violence in the property settlement process.
Where relevant, the Court can consider the effect of family violence on a person's ability to make financial and non-financial contributions.
The economic effect of family violence can also be considered when assessing the parties' current and future circumstances.
This does not mean family violence automatically produces a particular percentage adjustment. Its effect must be considered in the circumstances of the individual case.
The legislation also expressly addresses matters including material wastage of property or financial resources and the nature and circumstances of liabilities.
These issues can be relevant where, for example, one party has intentionally or recklessly depleted assets or incurred liabilities that materially affect the parties' financial position.
They can.
The Family Law Act expressly includes the extent to which a party has the care of a child under 18, including the need to provide appropriate housing for that child, as a relevant consideration.
That does not mean the parent with greater care of the children automatically gets to keep the family home.
It does mean that the practical housing needs of children can form part of the broader assessment of the parties' current and future circumstances.
The Court can also consider matters such as age, health, income, financial resources and capacity for employment.
For example, a parent who reduced their paid employment substantially to care for children may be in a different financial position after separation from a parent whose career and earning capacity continued largely uninterrupted.
Before meaningful negotiations can take place, the parties need a reliable understanding of the home's value.
Sometimes they can agree on a value after obtaining market appraisals.
A real estate agent's appraisal can help establish a likely market range, but it is not the same as an independent property valuation.
Where value is disputed, particularly if one person wants to keep the house, an independent valuation may be appropriate.
Often the parties jointly instruct a qualified valuer.
This can avoid the predictable situation where the person retaining the property argues for a lower value and the person being paid out argues for a higher one.
Potentially.
But wanting to keep the house and being financially able to keep it are different things.
Assume a couple owns a home worth $1.4 million with a mortgage of $600,000.
That gives them $800,000 in gross equity before considering sale costs or other adjustments.
If one person is going to retain the property, they may need to refinance the $600,000 mortgage into their sole name and fund whatever payment is required to the other person under the overall property settlement.
The lender decides whether that person qualifies for the loan.
A family law agreement or Court order cannot require a bank to lend money.
If retaining the home is important, borrowing capacity should therefore be investigated before the settlement is finalised.
The property may need to be sold.
Sale is often the practical solution where neither party can refinance the mortgage or raise enough money to retain the property as part of the settlement.
If the house is to be sold, the settlement documents should deal with the mechanics of the sale.
That may include:
These details matter.
An agreement that simply says “the house will be sold” can create another dispute when the parties disagree about how that sale is actually going to happen.
Sometimes.
The parties may agree, or in an appropriate case seek orders, that the home will not be sold immediately.
For example, one parent might remain in the home with the children until a specified event.
A deferred sale needs careful drafting.
The agreement or orders may need to address who pays the mortgage, council rates, insurance and repairs, whether payments will result in an adjustment later, and precisely what event triggers the sale.
A deferred sale also means the parties remain financially connected for longer.
That needs to be weighed against any benefit of retaining the home for a period.
Superannuation is property for family law purposes, although special rules apply to how it is dealt with.
A property settlement should consider superannuation alongside the parties' other assets.
In some cases, a superannuation split can help structure the overall settlement where one person is retaining more of the non-superannuation property.
A superannuation interest can be divided by an appropriate superannuation splitting order or agreement.
The receiving person does not ordinarily receive the money as cash. It remains within the superannuation system and is subject to the normal rules governing access.
There are also procedural requirements where proposed orders will bind the trustee of a superannuation fund.
Superannuation should therefore be considered before the property settlement documents are finalised, rather than dealt with as an afterthought.
A transfer of property following the breakdown of a marriage or de facto relationship may qualify for an exemption from transfer duty in NSW under section 68 of the Duties Act 1997 (NSW).
The exemption can apply in a number of circumstances, including certain transfers made under Court orders, financial agreements or agreements dealing with the division of relationship property following separation.
The requirements need to be checked against the particular transaction.
This can be financially significant because ordinary transfer duty on an interest in Sydney property may be substantial.
The proposed property transfer should therefore be considered when the settlement is being structured, not after the agreement has already been finalised.
Reaching an agreement about what happens to the house is only part of resolving a property settlement.
The agreement should usually be formally documented.
Two common options are Consent Orders and a Binding Financial Agreement.
Consent Orders are orders made by the Federal Circuit and Family Court of Australia with the agreement of the parties. A contested hearing is not required.
The Court considers the proposed property orders before deciding whether to make them.
A Binding Financial Agreement is a private agreement made under the Family Law Act. It is not approved by the Court.
Strict requirements apply to Binding Financial Agreements, including independent legal advice for each party.
Which method is appropriate depends on the circumstances and what the settlement needs to achieve.
An informal agreement may leave issues unresolved, including enforcement, future property claims, superannuation and the mechanics of transferring the home.
Not necessarily.
Many property settlements are resolved through disclosure, negotiation, mediation or another form of dispute resolution.
If an agreement is reached, it can usually be formalised without a contested Court hearing.
Court proceedings may become necessary where there is a significant dispute about the property pool, disclosure, valuations, contributions or the appropriate outcome, or where one party refuses to engage.
Even where proceedings have started, the parties can still reach agreement before a final hearing.
There are time limits.
For married couples, an application for property settlement generally needs to be filed within 12 months after the divorce becomes final.
For de facto couples, the general time limit is two years after the relationship breaks down.
Divorce and property settlement are separate processes.
You do not need to wait until you are divorced before resolving what happens to the family home or the rest of your property.
If the relevant time limit has already expired, it may still be possible to ask the Court for permission to proceed. Permission is not automatic.
Before making that decision, it helps to know:
The question is not simply whether you want the house.
It is whether keeping it works within the overall property settlement and whether you can afford it afterwards.
The family home is often where the financial and practical consequences of separation meet.
It may need to be valued, refinanced, transferred or sold. The children's housing needs may be relevant. Superannuation and other assets may affect whether one person can retain the home. The 2025 property reforms also mean that the economic effect of family violence, material wastage and liabilities should be identified where relevant.
Getting the structure right early can avoid agreeing to an outcome that cannot actually be implemented.
Urban Law Group advises on property settlements involving the family home, including negotiations, Consent Orders, Binding Financial Agreements, property transfers and Family Court proceedings.
If you are separating and need to work out what happens to the family home, contact Urban Law Group to discuss your circumstances.
If you are dealing with a property settlement and would like to speak with one of our experienced lawyers, make an enquiry.