Whether you are married, in a de facto relationship or a civil union, relationships break down all the time. When this happens it is important that you get the right legal advice about how to proceed with your property settlement. Our experienced Head of Property, Mark Laird, has compiled this article to help you understand how you can transfer your home.
When a property transfer on breakdown of relationship between domestic partners, spouses or common-law partners on breakdown of their relationship it may be exempt from stamp duty. This is because the transaction occurs after the relationship has broken down and therefore does not occur in the course of a business or commercial activity. However, if you are transferring an asset between non-arm’s length parties (for example, a private company owned by one party), you will need to file an election with the State Revenue Office.
If you are selling the property after it has been transferred, you will have to pay capital gains tax on any profit you make. However, if you are eligible for the main residence exemption, you will not be required to pay CGT on your gain as long as you lived in the property as your main residence before and after the transfer.
It is important to remember that unless there is a court order, any property and debts acquired during a marriage/common-law relationship are considered joint assets. This means that you will be responsible for any debts incurred by your partner no matter who used the credit card or borrowed money. This is why it is important to get independent legal advice before making any financial decisions that could potentially affect your relationship breakdown settlement.