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De facto property settlement

When a couple are living in a de facto relationship, the unfortunate outcome of a relationship breakdown usually results in the need for property settlement. The process for de facto property settlement is essentially the same as it is when splitting assets in divorce. However, some considerations need to be assessed to determine whether a relationship is considered de facto, which can influence the outcome of the settlement.

What is a de facto property settlement?

Section 4AA of the Family Law Act 1975 (Cth) sets out the various considerations when assessing whether a relationship is a genuine de facto relationship.

Determining whether the relationship constitutes as a de-facto relationship is the starting point for a de facto property settlement. The Federal Circuit & Family Court of Australia will have jurisdiction to deal with a de-facto property settlement if the relationship was two years or greater in duration, or if there is a child to the relationship, or where a party made substantial contributions and the failure to recognise such contributions would result in a serious injustice.

If you are in doubt as to whether your relationship constituted a de-facto relationship or the other party disputes the existence of a de-facto relationship, our experienced family lawyers can advise you

What is included in de facto property settlements?

All property, whether jointly or individually owned at the date of the agreement or Court Order is considered part of the asset and liability pool. The assets and liabilities that will be taken into consideration in a de-facto property settlement, include but are not limited to:

  • Real property (such as the relationship home, investment properties, or a farm)
  • Personal property (such as savings, vehicles, boats, and shares)
  • Trusts
  • Inheritances
  • Businesses
  • Superannuation
  • Pets
  • Liabilities including mortgages, personal loans, business loans, or credit card debt


How are assets divided in a de facto relationship?

In reaching an outcome that must be ‘just and equitable’, the Federal Circuit & Family Court of Australia will consider the following:

  • The financial contributions of each party at the commencement of the relationship
  • The financial contributions of each party during the relationship
  • The financial contributions of each party post-separation
  • Indirect financial contributions, such as renovations to real property
  • Non-financial contributions such as being the primary carer to any children born to the relationship, or home-maker duties
  • The future needs of each of the parties – this consideration arises (for example) when one party has the primary care of the children, if a party is unable to support themselves financially, if one party suffers from a health condition which impacts their earning capacity, or where there is a significant disparity in income.

Formalising a de-facto property settlement

If an agreement can be reached in respect to the distribution of the assets and liabilities, there are two options to formalise the agreement to ensure it is legally enforceable:

  1. An Application for Consent Orders together with a Minute of Order filed in the Federal Circuit & Family Court of Australia; or
  2. A Financial Agreement prepared pursuant to section 90D of the Family Law Act 1975.


Consent Order


A Consent Order is a document that is scrutinised by the Court in respect to whether it meets the requirements of justice and equity. The parties each sign the document, including an accompanying Minute of Order and both are filed in the Court for the seal of the Court. There is no need for attendance at Court by the parties or their solicitors.


Financial Agreement


A Financial Agreement (often referred to as a Binding Financial Agreement) is akin to a contract, and is not scrutinised by the Court. It requires both parties to have obtained independent legal advice, and for both parties’ lawyers to sign a lawyer’s statement indicating that the requisite advice has been provided to the parties outlining the advantages and disadvantages of entering into the Financial Agreement. Financial Agreements are often utilised when there is a likelihood that the justice and equity principles would not be met.

In the event that an agreement cannot be reached, all reasonable attempts have been made to resolve the issues, and pre-action procedures have been complied with, an Application for property Orders to the Federal Circuit & Family Court of Australia may need to be considered.

De facto property settlement time limit

A party has two years from the date of separation to commence property settlement proceedings. Thereafter, a party will be required to make an Application to the Court to be heard out of time.


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