Is now a good time to finalise a Family Law Property settlement?
19 December 2018
It is December 2018. After many years of rising property prices in Melbourne and the rest of Australia, property values have fallen. The Australian and US share markets are also down. Separating couples now have assets (including Superannuation) which are valued at significantly less than the valuation a year ago. However, their debt level would often be at the same level. The net result of this is that there is significantly less to divide up.
If you are looking at keeping the family home as part of a Family Law Property Settlement, the timing may not get better than this (unless the housing market continues to fall in 2019- and opinion is divided about this). If you are looking at refinancing existing debt and paying out your spouse/partner, you would be able to do this today by borrowing a lot less that you would have had to borrow a year ago. This is a good strategy if you earn sufficient income and are able to afford to repay the new level of borrowings. Also, by retaining your existing home in Melbourne, you avoid the costs of purchasing a new home (e.g. Government Stamp Duty which is usually about 5% of the purchase price).
However, the problem you may face is that the Banks may not wish to lend you as much money as they would have a year ago! Any bank considering whether to lend money or re-finance will obtain a current valuation on your property (which may end up being even less than what the figure you are working on). The Bank will also rigorously assess your capacity to repay the loan taking into account all of your other financial commitments. We have had Banks knock back some clients on refinancing recently which has left them in an unwelcome position. Where neither party is able to buy out the other one, then the only way out is for the property to be sold and for the proceeds of sale to be divided in a just and equitable manner. At the end of the process, clients may find themselves not being able to afford to buy housing in the same neighbourhood and, to stay in the same neighbourhood, they are forced to rent.
If you are separated and have not yet finalised a property settlement, it is essential to obtain the best Family Law legal advice available. Telephone Melbourne Family Lawyers on +613 9670 9677 or click on the blue Make An Enquiry button on this page.
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In Australia, the Family Law relating to De Facto partners is substantially the same as the law relating to people who are legally married. The Family Law Act covers married people and de facto couples, including those in homosexual relationships.
When should I apply for a Family Law Property Settlement?
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The only legal rules about when you should apply for a Family Law property settlement are concerning how late you can apply. People in a De Facto relationship have up to two years after separation. Married people have up to one year following the Divorce. Contrary to a popular belief, you do not have to wait until you are divorced to have a property settlement.
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In a Family Law Property Settlement, Superannuation is always taken into account when considering a division of property between spouses (including de facto or same-sex partners). These days, most people have Superannuation entitlements. Whilst those Superannuation entitlements may not be readily accessible now if you are below retirement age, they will make a difference to your financial situation when you do retire.
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A Family Lawyer will advise you as to his or her opinion as to where you stand when applying the applicable Family Law to your particular situation. However, a Family Lawyer will never be able to provide you with a definitive outcome in your case as the outcome of your case will depend on the following.
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So your spouse has just announced, "It's over!" and you need to find a law firm to help guide you through one of the most stressful situations you are going to face. Where do you start? Do you go back to your local conveyancing law firm who looked after the purchase of your home?
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On 1 March 2009, new Commonwealth laws for spousal maintenance and the division of property for people in de facto relationships came into force. The Commonwealth Family Law Act 1975 now applies to both married and de facto couples as well as same-sex couples. Previously, de-facto relationships were covered by State Laws and disputes between de-facto couples were determined by State Courts such as the Supreme Court and County Court- Such disputes are now within the jurisdiction of the Family Court of Australia and the Federal Magistrates Court, as are disputes concerning children of all relationships.
Family Court Pre Action Procedures
9 March 2009 -
Family Law Disclosure Rules
22 January 2009 -
A direct extract from Family Law Rules- Parts 13.1 and 13.2
Talk to us now for advice about your situation by phoning (+61) 03 9670 9677