Dividing property after a relationship breakdown is one of the most significant financial decisions you will ever make. Property consent orders allow separating couples to formalise an agreed property settlement through the Federal Circuit and Family Court of Australia, providing a legally binding division of assets, debts and financial resources without the need for a contested court hearing.
What Can Property Consent Orders Deal With?
Property consent orders can deal with the full range of assets and liabilities accumulated during a relationship. The Family Law Act 1975 (Cth) defines property broadly, and consent orders commonly address:
- The family home and any investment properties
- Bank accounts, term deposits and savings
- Shares, managed funds and cryptocurrency holdings
- Business interests, including company shares and partnership interests
- Motor vehicles, caravans and boats
- Household contents and personal effects
- Debts including mortgages, personal loans, credit cards and tax liabilities
- Superannuation interests (dealt with through a superannuation splitting order)
Consent orders can also include provisions for the sale of property, the transfer of property from one party to the other, the payment of a lump sum, and the release of one party from joint debts.
The Court's "Just and Equitable" Requirement
The Court will only approve property consent orders if it is satisfied the proposed division is just and equitable in all the circumstances. This does not necessarily mean a 50/50 split. The Court considers the same factors it would apply in a contested hearing, including:
- Financial contributions: Income earned, assets brought into the relationship, and inheritances or gifts received by either party.
- Non-financial contributions: Homemaking, caring for children, renovations, and unpaid work in a family business.
- Future needs: Age, health, earning capacity, care of children, and the financial impact of the relationship on each party's future prospects.
If the Court considers the proposed split is significantly unfair to one party, it may refuse to make the orders. This is why it is important to obtain legal advice before agreeing to a property settlement, even if the arrangement seems reasonable to both parties at the time.
Stamp Duty and Tax Advantages
One of the most significant practical benefits of property consent orders is the stamp duty exemption that applies to transfers of real property made under a court order. In most Australian states and territories, transferring property between former spouses or de facto partners pursuant to consent orders attracts no stamp duty. Without consent orders, the transfer would be treated as a standard conveyance and assessed for duty at the prevailing rate, potentially costing tens of thousands of dollars.
Additionally, capital gains tax (CGT) rollover relief may be available for asset transfers made under consent orders, allowing the receiving party to defer any capital gain until they ultimately dispose of the asset. These financial advantages make consent orders the preferred mechanism for formalising property settlements in the vast majority of cases.
"Property consent orders are not just a legal formality - they unlock stamp duty exemptions and CGT rollover relief that can save you thousands of dollars on the transfer of assets."
Time Limits and Next Steps
Strict time limits apply to property claims under the Family Law Act. Married couples have 12 months from the date their divorce becomes final to file property consent orders. De facto couples have two years from the date of separation. Missing these deadlines means you will need the Court's permission to proceed, which is not guaranteed and adds further cost and delay.
At Reid+Alexander Lawyers, we prepare property consent orders that are thorough, precise and structured to withstand Court scrutiny. We ensure every asset, liability and superannuation interest is properly accounted for and that the orders are drafted in a form the Court will approve. Contact us to arrange a consultation about your property settlement.