Purchasing a Property Together in a De Facto Relationship

A de facto relationship can be defined as a situation where two people live together as a couple without being married. Despite the not being spouses they hold the same legal rights as a marriage.

If you are part of a de facto relationship there are a number of important considerations you need to make if you wish to purchase a property together:

1. Your status as tenants.

You have two options regarding your status as tenants. First, you and your partner can choose to become joint tenants. This is where you share the ownership of the property. If you decide to sell, it must be sold as a whole. In case your relationship breaks down and you separate you need to make an agreement on how you will divide the property. The other person will automatically gain ownership of the property if you die with or without a will.

Your other option is to be tenants in common. In this arrangement, each of you owns a share of the property. Each person’s share may be equal, smaller or bigger than the other. You have the option to sell off your share if you are a tenant in common. If a partner passes away, how the share will be passed on will depend on the will of the deceased or the rules of intestacy.

2. Property agreement.

You and your partner may choose to come up with an agreement regarding your property, and if you choose to do so, your financial arrangement as well.

You need to hire a lawyer to help you draft the property agreement. It is worth noting that depending on your situation you may be required to pay stamp duty.

You may also choose to forego having a formal agreement. Keep in mind, however, that it could complicate the process of settling a dispute if one arises in the future. If this happens and you do not have an agreement, you need to negotiate it with your partner with the help of a solicitor.

3. If one partner already owns a property.

In this case, both partners may choose to have a transfer of the title from one partner into both parties in the relationship. Depending on your situation, you may or may not be required to pay stamp duty for this. Typically, de facto partners who have been together for two years or more are exempt from paying the stamp duty.

4. Getting professional assistance.

It is advisable that you get the help of a solicitor when purchasing a property when you’re in a de facto relationship. This helps ensure that the process goes smoothly and that possible legal complications are avoided altogether. It may cost money to hire a lawyer, but it is a small investment compared to the cost of litigation should a problem arise between both parties in the future with regards to the property.

If the relationship breaks down, you will also need legal assistance to help secure your interests during a mediation process, or if the matter has to be resolved in court.

For any more information regarding de facto relationships please call (08) 9289 7777.