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We’ve separated – what do we do with the house?
Marriage and relationship separations provide enough stress without the actual property settlement adding to it. It needn’t be that hard.
If you and your ex can agree that one will get the house and the other will get some money, or if there are two houses, you will get one and your ex will get the other, it can be a pretty straightforward and simple process.
Very often people come to see us saying they’ve reached such an agreement and ask us to give effect to it. At that stage we tell them about Transfer Duty (formerly known as stamp duty) which will apply to the person acquiring the other’s share of the house.
So if the house is worth $400,000, say, and you each own half, and you are getting the house, you are effectively acquiring your ex’s share of the house, which is a $200,000 dutiable transaction, which will attract duty of $5,035. The duty on $250,000 is $6,935 and $8,835 on $300,000.
However, if you have a Family Court Order, the Duty falls to the Nominal Duty rate of just $20.
“But I don’t want to go to the Family Court,” I hear you say. If you both agree to the settlement arrangement proposed, you simply need to have a lawyer draft your wishes into Consent Orders for the Family Court to agree to and then attach the Family Court seal.
This is sufficient under the Duties Act for you to be eligible for the $20 Nominal rate.
Here in Kalgoorlie, one of the local Magistrates will take the place of the Family Court and Seal the Orders.
This will typically cost around $1,000 for this, which is not a bad return on investment – spend $1,000 to save $5,000, $6,000 or $8,000+.
You can also instruct the lawyer to arrange the settlement as well whilst they’re about it, or at least ask them for a quote for it.
Our fee is generally $990 plus $220 per bank involved, plus normal disbursement costs to outside agencies for things such as Landgate fees, title searches and duty. So if you’re staying with the same bank, that typically amounts to around $1,500, all up.
Or if you can’t agree, the Family Court will order a settlement, and that’s when it starts to get really expensive. Indeed, it's often cheaper to just pay the duty.
The following is the basic process:
- Agree between you and your ex on the financial & property settlement. ie who will get the house and how the costs will be met;
- Whichever of you is keeping the house needs to arrange the refinance of the loan on the house into their name alone. Talk to the bank or finance broker to arrange this;
- If finance is likely to be approved, consult a lawyer about preparing Consent Orders;
- Once you have your Consent Orders, bring them to us (or any other settlement agent or lawyer) and have us prepare the necessary conveyancing documents and arrange settlement; then finally
- Go your separate ways, knowing all joint property affairs are now sorted out.
A final point here is that it’s pretty important to do this reasonably soon after the separation or divorce, before your individual financial situations have changed much. Leaving it for years often causes unforeseen problems.
DISCLAIMER: Neither Goldfields Settlements, nor any of its staff are lawyers, so none of the above should be construed as legal advice. Readers are advised to seek their own independent legal advice on these or any other matters involving property dealings, preferably before entering into them.
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