When a married or de facto couple separates in Australia, they need to divide what they own and owe. This is called a property settlement. Couples can agree on it themselves and make it formal, or ask the Federal Circuit and Family Court of Australia to decide. There are strict time limits: 12 months after a divorce takes effect, or 2 years after a de facto relationship ends.
What counts as property when a couple separates?
A property settlement covers more than the family home. Moneysmart lists property, savings, investments, super, vehicles, and debts and loans. Debts are part of the picture too, including mortgages, credit cards and buy now pay later accounts.
The name on the paperwork does not decide everything. Someone can still have rights to property even if it is only in their former partner's name, or if they earned little or no money during the relationship.
Married and de facto couples can both apply for a property settlement under the Family Law Act 1975.
How is property divided? The four steps
Since 10 June 2025, the steps for working out a property settlement have been written into the Family Law Act 1975 itself, after changes made by the Family Law Amendment Act 2024. Before then, the steps came from court decisions. The Attorney-General's Department explains that the court is not required to make an order. It will only make one if satisfied that it is just and equitable.
In plain terms, the steps are:
- Identify the property and debts. Work out each person's legal and equitable interests in property, and their liabilities.
- Look at contributions. This includes financial contributions, and non-financial ones like caring for children and running the home.
- Look at current and future circumstances. Things like age, health, ability to earn an income, and the care and housing needs of any children.
- Check the result is just and equitable. The outcome as a whole has to be fair in the circumstances.
There is no automatic 50/50 split. The result depends on the facts of each relationship.
What changed in June 2025?
The court now has to consider the economic effect of family violence, where relevant, when deciding a property settlement. The definition of family violence now includes economic or financial abuse, such as unreasonably denying someone financial independence or support.
Other changes that took effect on 10 June 2025:
- Wasting property on purpose or recklessly, and how debts were run up, are now listed as things the court considers.
- The housing needs of children are now a listed consideration.
- The duty to give each other all relevant financial information and documents is now in the Act. Before, it was only in the court rules.
The new property laws apply to new and existing cases, unless a final hearing had already started before 10 June 2025. Existing property orders do not change. The Federal Circuit and Family Court has a summary of the property changes.
What are the time limits for a property settlement?
| Relationship | Time limit to apply to the court |
|---|---|
| Married | Within 12 months after the divorce order takes effect |
| De facto | Within 2 years after the relationship ends |
Missing the deadline means asking the court for permission to apply out of time. Permission is not automatic.
Divorce and property settlement are separate legal processes. A couple does not have to wait for a divorce to sort out their property. For married couples, the 12 month clock only starts once the divorce takes effect.
Extra rules for de facto couples
For de facto couples, the court can generally only make property orders if certain conditions are met. These include having a geographical connection to a participating jurisdiction, which covers every state and territory except Western Australia. It must also meet at least one other test, such as the relationship having lasted at least two years or there being a child of the relationship. The court's financial and property overview lists the criteria.
What happens to superannuation when you separate?
Super is often one of a couple's largest assets, and Moneysmart notes that many people forget to include it. Family law treats super as a different type of property. Couples can value their super and split it, but splitting is not compulsory.
A super split does not turn super into cash. The money stays in the super system and usually cannot be accessed until retirement age.
Before a court can make a splitting order, the super fund trustee has to be told about the proposed order. This applies whether the couple agreed or a judge decided. If the split is part of a consent order application, written notice of the proposed orders has to be served on the trustee at least 28 days before filing. The trustee then has 28 days to object. The court's superannuation page has more detail.
How to make a property agreement legally binding
Couples who agree do not need to go to court. The Family Law Act 1975 gives two ways to make the agreement formal.
Consent orders
The couple asks the court to turn their agreement into court orders. Even with an agreement, the court can only make financial orders that are just and equitable. Once final orders are made, they can only be changed in limited circumstances. The court explains how to apply for consent orders.
Financial agreements
A financial agreement (often called a binding financial agreement) is a contract made under the Act, outside court. Each person must get independent legal advice from an Australian legal practitioner before signing. The court can set these agreements aside in some circumstances.
Why it matters for tax
When assets like property or shares change hands after a separation, capital gains tax can normally apply. The ATO's relationship breakdown rollover can put that tax off. It only applies if the assets are transferred under a court order or another formal agreement, such as a binding financial agreement. If the rollover applies, it must be used. The person who receives the asset may face capital gains tax when they later sell it. A registered tax agent can explain how this works in a particular case.
What if we cannot agree?
A Family Dispute Resolution provider can help separated couples work through disagreements about property, debts and super. If that does not resolve things, either person can apply to the court for property orders.
Before applying to the court, both sides have to follow compulsory pre-action procedures, unless an exemption applies. This involves genuinely trying to resolve the dispute, including through dispute resolution, and exchanging financial information.
First practical steps after separating
Moneysmart's divorce and separation financial checklist suggests:
- Writing down the date of separation.
- Gathering bank, loan, credit card, super, tax, insurance and property documents.
- Listing everything owned and owed, with values.
- Telling any mortgage lender about the separation and reviewing redraw facilities.
- Checking super beneficiary nominations and updating wills and powers of attorney.
For the wills side, see how much a will costs in Australia.
When is it worth getting a family lawyer?
A family lawyer can explain what a fair range of outcomes might look like and draft consent orders. They can also give the independent legal advice a financial agreement legally requires. Legal advice is especially worth having when property is in one person's name, there is a business, trust or large super balance, family violence or financial abuse is involved, or a time limit is getting close.
FIZO shows whether a family lawyer is on the official register. You can find a family lawyer on FIZO.
This is general information only and does not take your personal circumstances into account.