When people ask about divorce and property settlement, one of the most common questions is whether assets are automatically split 50/50. The short answer is no. Under the Family Law Act 1975 (Cth), several factors determine how assets are to be divided following the breakdown of a marriage or de facto relationship. This article explains how property settlements work, how they are calculated, and how we determine who gets what after a separation.
What is a property settlement?
A property settlement is the legal process of dividing assets, liabilities, and financial resources between separating partners. This includes but is not limited to:
- The family home
- Investment properties
- Cars, boats, and other vehicles
- Superannuation
- Business interests
- Debts such as mortgages, loans, and credit cards
The aim of a property settlement is to reach a just and equitable division, not necessarily an equal one. This principle is set out in the Family Law Act 1975, which governs how property matters are resolved after separation.
How does a property settlement work?
Understanding how a property settlement works is essential for anyone navigating separation. The Federal Circuit and Family Court of Australia follows a structured four-step process:
Identify and value the property pool
The first step is to identify the property pool - that is, all assets, liabilities, superannuation and financial resources owned jointly or individually. Both parties must provide full financial disclosure of all property they own or are interested in. Accurate valuations are critical, as underestimating or hiding assets can result in unfair settlements and potential legal consequences later on.
[tip_box]Always request independent valuations for major assets like property, businesses, or superannuation. Relying on estimates or one party’s figures can lead to disputes and unfair outcomes.[/tip_box]
Assess contributions
Once we have determined the pool, the Court considers contributions to the acquisition, maintenance and preservation of all assets. The Court considers each party's financial contributions (such as the application of their income, property acquired and inheritances received) and non-financial contributions (such as homemaking and caring for children). The Court also considers the indirect contributions of a party, such as any assistance received by a party’s family. The Court considers financial and non-financial contributions equal, meaning that unpaid work in the home can be just as significant as paid employment when assessing contributions.
We also consider the effect of any family violence by one party against another on a party’s ability to make contributions.
Consider future needs
We consider their future needs once we have worked out each party's contributions. The court considers many factors when assessing future needs. These factors include, but are not limited to, the age, health, and income-earning capacity of each party; the care of the children; and the need of a parent with care of children under 18 years old to provide appropriate housing for them; and the effect of family violence on the current and future circumstances of the parties.
The Court aims to ensure that both parties can move forward with security, especially if one party faces ongoing responsibilities or limited financial independence.
Ensure the outcome is just and equitable
Finally, the Court ensures that the division of assets is fair in all the circumstances. This final step acts as a safeguard, allowing the Court to adjust outcomes to reflect the parties' real-life situations.
This process helps determine how a property settlement is calculated once parties have separated, but every case is unique.
Is property settlement always a 50/50 split?
The idea that divorce or separation automatically results in a 50/50 property settlement split is a myth. The outcome could be 60/40, 70/30, or any other variation depending on individual circumstances.
The idea of a spouse receiving half of everything after separation often comes from simplified media portrayals or from hearing about overseas systems where equal division may apply. In reality, Australian family law focuses on achieving what is fair in the circumstances of each individual case, not an automatic 50/50 split.
Factors that influence 'who gets what'
When considering property settlement and who gets what, the Court examines a wide range of factors, including:
- Length of the relationship: Longer relationships often mean more shared contributions.
- Age and health: A partner with health concerns or reduced earning ability may receive more.
- Children: The primary caregiver usually has increased financial needs.
- Earning capacity: Differences in income earning potential will play a role in balancing outcomes.
- Special contributions: Large inheritances, gifts, or business success may be factored in.
Each of these influences helps determine how to work out a property settlement fairly.
Do de facto relationships follow the same rules as married couples?
Yes. De facto couples are entitled to property settlements under the Family Law Act, provided they bring an application for a property settlement within two years of the relationship ending.
Various criteria must be met for a party to a de facto relationship to apply for a property adjustment. At least one of the following must be applicable -
- The relationship must have lasted at least two years.
- If you have a child together,
- If one party made significant contributions to the relationship, welfare of the family or to the assets and a failure to make any order would be unfair to that party;
- If the relationship was registered.
If any of these conditions are met, the Family Law Act applies, and the way a property settlement works for married couples is also the same for de facto partners.
Common misconceptions about property settlement
Many separating couples begin the process with mistaken assumptions, so it’s important to clear up some of the most common misconceptions about property settlement.
“Everything is split down the middle”
That's not true. Outcomes depend on contributions and needs, not a rigid formula and not automatically 50/50. Every case is different, so it is important to speak to a qualified family law professional to obtain advice tailored to your individual circumstances.
“Superannuation is separate”
Superannuation is part of the property pool and can be split between partners.
“Only financial contributions matter”
The Court recognises non-financial contributions, such as caring for children or managing the home, as equally important as financial contributions.
How to work out a property settlement without going to Court
While the Court provides a framework, many couples resolve their property settlement through negotiation, mediation, or lawyer-assisted agreements.
Options include:
- Consent orders: Approved by the Court and enforceable.
- Binding Financial Agreements (BFAs): Contracts outlining how property will be divided.
Reaching an agreement outside of Court is often faster, less stressful, and more cost-effective.
Frequently asked questions about property settlements
Do I have to go to Court for a property settlement?
No. Most property settlements are finalised through negotiation, mediation, consent orders or Binding Financial Agreements. Court is generally only needed if an agreement can’t be reached.
What happens if my ex-partner won’t disclose their assets?
Full disclosure is legally required. If a partner hides assets, the Court can order disclosure, impose penalties, or adjust the settlement to ensure fairness.
Is there a time limit to apply for property settlement?
Yes. Married couples must apply within 12 months of their divorce being finalised, and de facto partners must apply within two years of separation.
How long does a property settlement take in Australia?
Simple settlements may be resolved in a few months. Depending on complexity and availability, disputes that go to Court can take significantly longer.
How much does property settlement cost?
Costs depend on a variety of factors such as the complexity of assets, the attitude of the parties and whether Court proceedings are required. An initial consultation with a lawyer provides tailored guidance.
When to seek legal advice
Because every relationship and financial situation is different, legal advice is critical to ensure your rights are protected. Our experienced team of Family Lawyers can help you:
- Understand how property settlement is calculated after separation
- Negotiate a fair outcome
- Draft binding financial agreements or consent orders
- Represent you in Court if necessary
How Carew Counsel can help
We combine our experience with clear advice and decisive action to ensure your settlement is fair, efficient, and legally secure.
- Map the property pool: Calculate the pool of assets, liabilities, superannuation and financial resources, , request disclosure, and coordinate independent valuations where required.
- Analyse contributions: Assess financial and non-financial contributions, including homemaking and parenting, and gather the evidence to support them.
- Assess future needs: Model practical ranges that reflect health, earning capacity, and child care so proposals are realistic.
- Negotiate strategically: Represent you in lawyer-assisted negotiation and mediation to reach an agreement early where possible.
- Formalise the outcome: Draft and file consent orders or prepare a Binding Financial Agreement, and obtain superannuation splitting orders where appropriate.
Handle complex structures: Provide advise on implications of family law property settlements on small businesses, trusts, and SMSFs, with attention to timing, refinancing, and other tax implications including engaging specialist experts where required.
Talk to experienced family lawyers today
It is a common misconception that property settlements are a straightforward 50/50 split, but Australian family law requires a much deeper assessment. For separating couples, this means outcomes are rarely identical and must be tailored to what is fair and equitable rather than equal. Understanding this can help manage expectations and reduce conflict during negotiations.
If you are unsure how to work out a property settlement, seeking expert legal advice ensures that your rights and interests are properly protected. Talk to our team of lawyers at Carew Counsel today. With professional guidance and our family law services, you can approach the process with clarity, realistic expectations, and the confidence to move forward.
Carew Counsel is recognised as one of Melbourne’s top family law firms, with over 40 years of experience helping clients achieve fair outcomes. Ranked in Doyle’s Guide and led by accredited family law specialists, our team combines deep expertise with a client-first approach to reduce stress and resolve matters efficiently.