How De Facto Couples Can Purchase Property in Australia

Purchasing a property in Australia is a significant financial decision, and it becomes even more complicated when it involves de facto couples. A de facto relationship is defined as a relationship between two people who are not married but are living together on a genuine domestic basis. In Australia, de facto couples have the same legal rights and obligations as married couples when it comes to property. This article aims to provide insight into how de facto couples can purchase property in Australia, including relevant statistics and diverse perspectives.

What is a de facto relationship?

Before we dive into the specifics of property ownership, it’s important to understand what constitutes a de facto relationship in Australia. According to the Family Law Act 1975, a de facto relationship is defined as a relationship between two people who are not married but are living together on a genuine domestic basis. This can include same-sex couples as well as opposite-sex couples. To be considered de facto, the couple must have lived together for a minimum of two years, or less if there is a child in the relationship or one party has made significant contributions to the relationship.

Understanding Property Ownership in Australia

Before delving into the details of how de facto couples can purchase property, it is essential to understand the different types of property ownership in Australia. The most common types of property ownership in Australia are:

• Sole ownership: This is when a single person owns the property.
• Joint tenancy: This is when two or more people own the property equally. In case of death, the ownership automatically transfers to the surviving owner/s.
• Tenancy in common: This is when two or more people own the property but not necessarily equally. In case of death, the ownership is passed on to the deceased’s estate.

Purchasing Property as a De Facto Couple

De facto couples in Australia have the same legal rights and obligations as married couples when it comes to purchasing a property. However, there are some important things to consider before making a property purchase. These include:

• Financial contributions: It is essential to have a clear understanding of each partner’s financial contributions towards the property purchase. This includes the deposit, ongoing mortgage repayments, and other related expenses.
• Legal agreements: It is highly recommended for de facto couples to have a legal agreement in place, such as a cohabitation agreement or a financial agreement, to protect their respective interests in the property.
• Joint tenancy or tenancy in common: De facto couples can choose to own the property as joint tenants or tenants in common. It is important to understand the legal implications of both types of ownership before making a decision.
• Legal advice: It is always advisable for de facto couples to seek legal advice before making a property purchase to ensure that their rights and interests are protected.

Statistics on Property Ownership for De Facto Couples

According to the 2016 Census, there were 1.35 million de facto couples in Australia, accounting for 16% of all couples. The same census data shows that 26% of de facto couples own their home outright, while 40% own their home with a mortgage.

A study by the Australian Housing and Urban Research Institute (AHURI) found that de facto couples face additional challenges when it comes to accessing the property market. These challenges include a lack of access to the same financial incentives and support available to married couples, as well as discrimination from landlords and real estate agents.

Diverse Perspectives on Property Ownership for De Facto Couples

There are diverse perspectives on property ownership for de facto couples in Australia. Some argue that de facto couples should have the same legal rights and obligations as married couples in all aspects, including property ownership. Others argue that de facto couples should not be entitled to the same rights and obligations as married couples, as marriage is a formal legal commitment that is not present in a de facto relationship.

Regardless of the differing opinions, it is essential to ensure that de facto couples have access to legal protections and support when it comes to purchasing property in Australia.

What happens if a de facto couple separates?

If a de facto couple separates, the division of property will be determined based on the same principles as married couples. The court will take into account factors such as the length of the relationship, each party’s financial contributions, and their future needs. If the couple has a cohabitation agreement in place, this will be taken into account when dividing property. It’s important to seek legal advice from a family lawyer if you are going through a separation, as they can provide guidance on how to navigate the legal system and protect your interests.

Stamp duty and tax considerations for de facto couples

When purchasing property as a de facto couple, it’s important to be aware of the stamp duty and tax implications. In most Australian states and territories, de facto couples are eligible for the same stamp duty concessions as married couples, as long as they meet certain criteria. This can include having a joint home loan, being registered as a couple with the state or territory government, or having lived together for a minimum period of time. It’s also important to consider the tax implications of property ownership, such as capital gains tax, which can be complex for de facto couples. Seeking advice from a financial advisor or accountant can help you navigate these considerations.

Conclusion

De facto couples have many of the same legal rights as married couples when it comes to property ownership in Australia, but there are some key differences that can affect how property is purchased and divided. It’s important for de facto couples to have a clear understanding of their legal rights and obligations, and to seek advice from a family lawyer when necessary. At Family Lawyers Mackay, we can help de facto couples navigate the legal system and protect their interests. Contact us today to schedule a consultation and find out how we can assist you.

FAQ