How to buy property in a de facto relationship

De facto relationships are more common than ever. In the last census, 10.4% of Australians were living in de facto relationships, an increase of almost 1% over the preceding five years, while those living in registered marriages had gone down by almost 2%.

While some view de facto relationships as a pathway to marriage, others never intend to marry but see their relationship as a long-term or permanent arrangement.

This means a large number of de facto couples are now entering the property market, sometimes as first-home buyers, or sometimes already owning property in their own right.

What does de facto mean?

‘De facto’ is a term used to describe two adults who live together as a couple and who are not legally married. It is also possible to be ‘de facto by distance’ if the couple lives apart – for example, in different states – but spend nights together when they are in each other’s local area.

Legally, de facto couples have most of the same rights as those in a marriage, and if a couple is buying property together, there are no major legal differences.

Understanding property agreements

Because buying a home is a legal process, de facto couples will be faced with a number of legal decisions before the purchase goes through.

Any couple looking to purchase a home will be asked to choose between joint tenancy or tenants in common agreements.

A joint tenancy will mean both partners own the property together and, if they choose to sell, they must sell the property as a whole. In the event of the death of one partner, the property automatically goes to the other partner.

A tenants in common agreement means that the ownership of the property may be based on the percentage which each partner invests into it. For example, a partner who is paying a greater amount of the deposit or the mortgage may have a greater share of the property.

A tenants in common agreement is more unusual in a romantic partnership, but can be useful if one partner makes a significantly higher financial contribution.

Dividing assets in a de facto relationship

Legally, the end of a de facto relationship is very similar to a divorce. While there is no legal contract of marriage to dissolve, almost everything else about the split will be the same.

If the splitting partners agree on the division of assets, they can sell the property or agree for one partner to buy the other out. In the event of disagreement over the division, independent legal advice should be sought.

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