At a glance — family home outcomes after separation
| Outcome | What it means | Typical scenarios |
|---|---|---|
| Sale | Property sold; net proceeds divided | Most common; clean break, both parties move on |
| Buyout | One party keeps the home; pays out the other's share | Where one party has financial capacity and emotional reason to stay |
| Deferred sale | Sale delayed (e.g. until youngest child finishes school) | Where stability for children is critical |
| Co-ownership continued | Both parties remain on title under modified arrangement | Rare; usually only short-term or specific circumstances |
| Section 44 Duties Act 2000 (Vic) exemption | Applies to transfers under consent orders or BFA | Saves substantial stamp duty |
| Mortgage refinancing required | When one party keeps the home | Usually needs lender approval |
| Court framework | Section 79 Family Law Act 1975 — just and equitable | Applied where parties can't agree |
Who actually keeps the family home after separation in Australia?
There's no automatic rule under Australian family law that determines who keeps the family home after separation. The outcome depends on the parties' agreement (most often) or the court's application of the four-step process under section 79 of the Family Law Act 1975 (Cth). In agreed matters, the four realistic options are sale (most common), buyout (one party retains, pays the other out), deferred sale (typically while children finish school), or continued co-ownership (rare). The choice between these depends on each party's financial capacity, the children's needs, the parties' attachment to the property, market conditions, and the structure of the overall property settlement. Stamp duty on property transfers between separating spouses is generally exempt under section 44 of the Duties Act 2000 (Vic) for Victorian properties, but only where the transfer is pursuant to consent orders, a Binding Financial Agreement, or court order — informal transfers don't qualify. Mortgage refinancing is typically required where one party buys out the other, and lender approval isn't guaranteed. At Fogarty Oliver Rothschild, family home matters are handled as part of the broader property settlement service, with in-house conveyancing for the property transfer. This guide is for separating couples trying to understand the realistic options and the financial implications of each.
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What's the legal framework for deciding who keeps the home?
For agreed outcomes, the parties decide between them — typically with legal input on what a reasonable outcome looks like.
For contested outcomes, the court applies the four-step process under section 79 of the Family Law Act 1975.
Step 1 — Identify the property pool. The home is one asset in a broader pool that includes superannuation, other real estate, savings, business interests, debts, and other property.
Step 2 — Assess contributions. Direct financial contributions (who paid the mortgage, who contributed to deposit), indirect contributions (parents' help, inheritances), non-financial contributions (homemaking, parenting, property maintenance).
Step 3 — Assess future needs under section 75(2). Age, health, earning capacity, care of children, future needs.
Step 4 — Just and equitable assessment. Overall outcome that's just and equitable in the circumstances.
The home isn't automatically split 50/50. The outcome depends on the four-step process applied to all the property and circumstances. See property settlement lawyer fees guide for the full process →
What are the four realistic options?
Option 1 — Sale
The most common outcome. The property is sold; net proceeds (after mortgage discharge and sale costs) are divided according to the property settlement.
When sale typically makes sense:
- Neither party has the financial capacity to maintain the mortgage alone
- Both parties want a clean break
- The home is too large or unsuitable for one party alone
- The property is the largest single asset and dividing it allows clean separation
- Market conditions support sale value
Practical considerations:
- Real estate agent selection and instruction
- Marketing campaign and auction vs private sale
- Sale costs (agent commission 1.5-3%, marketing, legal, removal)
- Mortgage discharge coordination
- Net proceeds distribution per consent orders or BFA
Typical timeline: 3-6 months from listing to settlement.
Cost saving via consent orders: Section 44 of the Duties Act 2000 (Vic) doesn't apply to sale (there's no transfer between separating spouses), so stamp duty isn't a factor. However, capital gains tax considerations may apply for investment properties or homes that haven't been the principal place of residence.
Option 2 — Buyout
One party retains the property; pays the other party out for their share.
When buyout typically makes sense:
- One party has strong attachment to the home (often the primary carer of children)
- One party has financial capacity to maintain the mortgage alone (or can refinance)
- The property has features specific to the family's needs (e.g. school zone, accessibility, location)
- Stability for children matters
- Market conditions don't favour sale
Practical considerations:
Valuation: Independent valuation typically required. Single joint valuer is usually most cost-effective.
Refinancing: The retained party usually needs to refinance the mortgage in their sole name. Lender approval depends on income, capacity to service the loan alone, and the loan-to-value ratio. Some lenders are more flexible than others on post-separation refinancing.
Buyout amount: Calculated as the other party's share of net equity in the home. For example: Home worth $1.5M, mortgage $700K, net equity $800K. If the buyout party is keeping 60% of the home's equity, they pay out $320K (40% of $800K).
Stamp duty exemption: Under section 44 of the Duties Act 2000 (Vic), the transfer is exempt where pursuant to consent orders or BFA. This is substantial — on a $1.5M property transfer, the exempted stamp duty is approximately $82,000.
Timeline: Typically 2-4 months from agreement to completed transfer, depending on refinancing approval.
Costs:
- Property valuation: $500-$1,500
- Refinancing application: typically no fee; some lenders charge $200-$500 establishment
- Legal fees for property transfer (conveyancing): included in family law package or $660-$990 standalone
- No stamp duty (exemption applies)
Option 3 — Deferred sale
Sale is delayed for a defined period — typically while children complete schooling or reach a defined age.
When deferred sale typically makes sense:
- Stability for children is the primary consideration
- Neither party can afford to buy out the other immediately
- Market conditions are unfavourable
- One party will primarily occupy the home during the deferral period
- The property has specific features tied to children's schooling, special needs, or community
Practical considerations:
Occupancy arrangement: Usually one party (typically primary carer) occupies the home during the deferral period. The other party doesn't pay rent but typically continues to contribute to the mortgage and outgoings (or these are agreed in the orders).
Mortgage: Typically remains joint. Both parties remain liable but practical responsibility for payment is agreed.
Sale trigger: Defined trigger event (e.g. youngest child reaches 18, completes secondary school, completes Year 12, or specific date).
Default provisions: What happens if the occupying party can't or won't sell at the trigger date? Need defined provisions.
Property maintenance: Who's responsible for repairs and improvements during the deferral period? How are decisions made about major works?
Capital appreciation/depreciation: Both parties share in market changes during the deferral period.
Risks:
- Joint mortgage means both parties' credit is exposed
- Practical disputes about contributions can arise
- Court applications to vary the deferred sale arrangement are not uncommon
Deferred sale requires careful drafting of consent orders to address these risks.
Option 4 — Continued co-ownership
Both parties remain on title and in some defined relationship to the property. Uncommon outside of specific circumstances.
When this might make sense:
- Investment property held jointly that both parties want to retain
- Short-term arrangement pending other resolution
- Cultural or community considerations
- Specific financial structures (e.g. property held in trust)
Risks:
- Joint ownership of property requires ongoing cooperation
- Disputes can arise about everything from maintenance to letting arrangements
- Future sale requires renewed agreement or court intervention
Most family law settlements don't continue co-ownership of the family home. It's generally not in either party's long-term interest.
What about stamp duty?
Section 44 of the Duties Act 2000 (Vic) provides a stamp duty exemption for transfers of property between separating spouses (or de facto partners) pursuant to:
- A consent order
- A Binding Financial Agreement
- A court order
The exemption is substantial. For property transfers on Victorian residential property, stamp duty would otherwise be approximately:
| Property value | Stamp duty (if not exempt) |
|---|---|
| $500,000 | ~$21,000 |
| $750,000 | ~$40,000 |
| $1,000,000 | ~$55,000 |
| $1,500,000 | ~$82,000 |
| $2,000,000 | ~$110,000 |
| $3,000,000 | ~$165,000 |
These are the amounts saved by structuring the transfer correctly.
Why informal transfers fail to qualify:
- The exemption requires a triggering legal instrument (consent order, BFA, or court order)
- "Doing it informally" — direct transfer between parties without documentation — doesn't qualify
- The State Revenue Office assesses ordinary stamp duty in informal transfers
Common scenario: Separating couple decides to "just transfer" the property to avoid legal cost. Saves $2,750 in consent orders fees. Pays $50,000-$80,000+ in stamp duty unnecessarily.
The economics of getting consent orders are usually overwhelmingly in favour of doing them properly.
What about the mortgage?
The mortgage situation depends on which option is chosen.
For sale:
Mortgage is discharged at settlement from sale proceeds. If sale proceeds don't cover the mortgage, both parties remain liable for any shortfall (negative equity scenarios).
For buyout:
Typically requires refinancing. The retaining party refinances the mortgage in their sole name. The other party is released from the mortgage. Lender approval is required.
Lender criteria for sole-name refinancing:
- Income sufficient to service the loan alone
- Debt-to-income ratio acceptable to lender
- Loan-to-value ratio acceptable (typically <80% for standard refinance, <90% with LMI)
- Credit history clean
- Property valuation supports the loan amount
If refinancing fails:
- Joint mortgage may continue with one party occupying and paying
- Both parties remain liable, with practical implications for credit and future borrowing
- This is generally not a satisfactory long-term arrangement
- May require sale or alternative structure
Important — recent valuation and lender requirements:
Family law transfers can be more straightforward with some lenders than others. Some lenders specifically handle separation-related refinancing well; others impose restrictive criteria. Early engagement with mortgage broker or bank during property settlement matters.
For deferred sale:
Mortgage typically remains joint. Both parties continue as joint borrowers. Practical responsibility for payment agreed in consent orders. Both parties' credit exposed to the mortgage's continued payment.
What if there are children?
Children's stability is a major factor in family home decisions.
Factors that affect family home outcome where children are involved:
- Whether the home is in a specific school catchment
- Whether the home is close to extended family, services, or community
- Whether the home has features adapted to children's needs (special needs accommodations, accessibility)
- The age of the children and their attachment to the home
- The primary care arrangements
Practical patterns:
- Primary carer often retains the home (buyout or deferred sale). Stability for children with the primary caregiver often supports retention.
- Sale where neither party can afford to retain alone. Both parents move to smaller accommodation; children adjust.
- Deferred sale where children are mid-schooling. Avoids disruption during critical educational stages.
The Family Law Act 1975 doesn't have specific rules about the family home and children — it's part of the broader section 79 just-and-equitable analysis. But the section 75(2) future needs factors include "whether either party has the care of children," which substantially affects outcomes.
What goes wrong with family home decisions?
The $82,000 stamp duty mistake. A 2024 matter where separating spouses transferred a $1.5M Melbourne property by direct transfer without consent orders. The State Revenue Office assessed standard stamp duty of approximately $82,000. Section 44 of the Duties Act 2000 (Vic) exempts transfers pursuant to consent orders or BFA, but informal transfers don't qualify. The stamp duty was payable. Consent orders cost: $2,750. Net loss from informal handling: approximately $79,000.
The refinancing that didn't happen. A 2024 matter where consent orders provided for buyout by the wife. The wife couldn't obtain refinancing approval (insufficient income for the loan alone). The mortgage remained joint. Both parties' credit was tied up. The husband couldn't obtain new lending for his own purposes. Eventually the property had to be sold — months later than would have been the case if sale had been agreed initially. Pre-orders engagement with the lender about refinancing capacity would have surfaced this earlier.
The deferred sale that wasn't drafted. A 2025 matter where the family home was the subject of "informal" agreement that the wife would stay until the youngest child finished Year 12. Five years later, when the time came, the wife claimed she should be entitled to remain longer. Without proper consent orders documenting the arrangement, the matter required new proceedings to resolve. Proper drafting at the time of separation would have avoided this.
(Client names withheld. Identifying details modified.)
What does the family home process cost at Fogarty Oliver Rothschild?
The family home is typically handled as part of broader property settlement. Costs depend on the pathway.
| Pathway | Family law cost | Conveyancing cost | Total |
|---|---|---|---|
| Consent orders (agreed) | $2,750 (property only) or $3,850 (combined) | $660-$990 for any transfer | $3,410-$4,840 |
| Binding Financial Agreement | $4,400-$9,900 per party | $660-$990 for any transfer | Variable |
| Property settlement negotiation | $6,600-$13,200 (includes orders) | $660-$990 for any transfer | $7,260-$14,190 |
| Litigated property settlement | Hourly billing | Per matter | Variable |
| Court filing fee | $205 for consent orders | N/A | $205 |
| Sale (where chosen) | N/A for sale; advice on outcome only | $660-$990 for conveyancing | Per real estate agent + conveyancing |
See full pricing → Fixed-fee packages
What's distinctive about Fogarty Oliver Rothschild:
Family law and conveyancing handled in-house by Elisa Rothschild. Integrated handling means:
- Section 44 Duties Act exemption coordinated automatically
- Property transfer coordinated with consent orders timing
- No duplicated effort between two firms
- Single point of contact across both family law and conveyancing aspects
Frequently asked questions
Does the wife always get the family home after separation?
No. There's no automatic rule. The outcome depends on the parties' agreement or the court's application of the four-step process under section 79 of the Family Law Act 1975. Outcomes range from sale (most common) to buyout by either party to deferred sale to continued co-ownership.
Can I be forced to sell the family home?
If parties can't agree, the court can order sale under section 79. But court orders for sale are typically a last resort — most cases reach agreement on the family home outcome.
Does the parent with primary care of the children automatically keep the home?
Not automatically, but children's stability is a relevant factor. Section 75(2)(d) of the Family Law Act 1975 includes "whether either party has the care of children" as a future needs factor, which often supports the primary carer retaining the home.
What stamp duty applies on a buyout?
Generally none, where the transfer is pursuant to consent orders or BFA, under section 44 of the Duties Act 2000 (Vic). This is a substantial saving — typically $20,000-$165,000+ depending on the property value.
Can I keep the family home if I can't refinance?
Depends on the alternatives. If refinancing in your sole name isn't possible, the options are: (a) continue joint mortgage with one party occupying (problematic long-term), (b) sell the property, (c) find an alternative borrower or guarantor arrangement, or (d) defer the buyout until refinancing becomes viable.
What's deferred sale?
A sale arrangement delayed for a defined period — typically while children complete schooling. Both parties remain on title and (usually) on the mortgage. One party occupies during the deferral period. Sale at the agreed trigger event. Requires careful drafting of consent orders.
Can I just transfer the home informally to my ex?
You can, but you'll typically pay full stamp duty (no section 44 exemption applies to informal transfers). For a $1M property, that's approximately $55,000 in stamp duty that consent orders would have saved.
Does the home have to be split 50/50?
No. The home is one asset in the broader property pool. Property settlement outcomes typically range from 40/60 to 60/40 depending on contributions, future needs, and other section 79 factors.
What if the home is owned by a family company or trust?
This is a common scenario in higher-asset matters. Beneficial ownership analysis and (potentially) the Kennon v Spry precedent on trust treatment apply. Specialist advice is needed.
Can we just rent out the home and split the income?
Possible as a short-term arrangement but not usually a satisfactory long-term outcome. Continued joint ownership of investment property is uncommon after separation.
What about capital gains tax?
Family law transfers between spouses pursuant to consent orders or BFA generally qualify for the marriage breakdown rollover for CGT purposes (the receiving spouse takes on the original cost base). Specialist tax advice may be needed for complex matters.
What about CGT on the sale of the family home?
The family home (principal place of residence) is generally CGT-exempt under the main residence exemption. Investment properties and properties not used as the main residence may have CGT implications on sale. Tax advice required.
Ready to discuss your family home decision?
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📧 elisa@fogartyoliverandrothschild.com.au
📍 84 Chapel Street, St Kilda VIC 3182
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Written and reviewed by Elisa Rothschild BA/LLB — Principal Lawyer, Fogarty Oliver Rothschild. Admitted to legal practice in Victoria. Conveyancing and property law in Melbourne since 2012. Last reviewed 27 May 2026.
This guide is general information about Victorian conveyancing, not legal advice for your specific transaction. For advice on your matter, book a free 15-minute consultation.