Selling or transferring the house after separation or divorce: time limits, consent orders, stamp duty exemptions and the CGT rollover

When a marriage or de facto relationship ends, the house is usually the largest asset and the hardest decision. There are only two outcomes: it is sold and the net proceeds divided as part of the overall settlement, or it is transferred to one former partner, who usually refinances to pay the other out. Both are ordinary property transactions wrapped in family law, tax and duty rules that reward doing things in the right order and punish informal shortcuts.

This guide covers the legal frame first: the time limits, how the courts now divide property after the June 2025 changes, and the three ways to make an agreement stick. Then the money: the stamp duty exemption in each state, the ATO's relationship-breakdown rollover and what it does to the main residence exemption, and the choice between selling and a buy-out. Then the practical run of selling a home that two people own and one may still live in. It is general information, not legal, tax or financial advice; a separation is precisely the situation where a family lawyer and a tax agent earn their fees, and where a family violence situation changes every step. Figures are as at September 2026 and sources are listed at the end.

The clock: how long you have to sort out property

Section 44 of the Family Law Act 1975 sets the limits for asking a court to divide property or order maintenance.

• Married couples: an application must be made within 12 months after the divorce order takes effect (section 44(3)). Separation itself starts no clock, and you can apply for property orders before the divorce is final; the Federal Circuit and Family Court notes that divorce "is a completely separate process to financial or property proceedings".
• De facto couples: within two years after the end of the relationship (section 44(5)), and only where the relationship qualifies: broadly two years' duration, or a child, or a registered relationship, or substantial contributions where injustice would otherwise result.
• Out of time: the court may grant leave, but only if satisfied that hardship would be caused to a party or a child if it did not (section 44(4) and (6)). The court's own guidance is that leave "is not always granted".

Western Australian de facto couples are dealt with under the state's Family Court Act 1997 in the Family Court of Western Australia, with the same two-year period. The limits matter for the house because a sale or transfer done years after separation, with no orders and no agreement, leaves either party able to reopen the whole settlement inside the window, and the house is where the value sits.

How property is divided since 10 June 2025

The Family Law Amendment Act 2024 rewrote the property provisions from 10 June 2025. The Attorney-General's Department's fact sheet for separating couples sets out the process the courts must now follow, and says "separating couples negotiating outside of court should also follow this process":

1. identify all property and liabilities of the parties;
2. assess each party's contributions to the property pool and to the welfare of the family;
3. assess each party's current and future circumstances, such as age, health, and the care and housing needs of any children; and
4. only make orders that are, in all the circumstances, just and equitable.

Two changes bear directly on the house. The economic effect of family violence must now be considered where relevant, both to contributions (a partner prevented from working) and to future needs (ongoing costs), and economic or financial abuse is expressly family violence. And the duty of financial disclosure now sits in the Act itself: each party must give the other and the court all relevant financial information, on an ongoing basis, with consequences for non-compliance that range from an adjusted settlement to costs orders and contempt. In practice that means the house is valued openly, the mortgage statements are exchanged, and an agent's appraisal obtained by one side is not a private document. There is no formula: the court's guidance is that "no one can tell you exactly what orders a judicial officer will make", and that the split "will probably be different from others you may have heard about".

Three ways to make the agreement stick

Most couples agree on the house without a hearing. What matters is how the agreement is recorded, because the stamp duty exemption, the CGT rollover and the finality of the settlement all depend on it.

• Consent orders. An Application for Consent Orders filed with the court, setting out the agreed division, which the court makes into orders without a hearing if it is satisfied the terms are just and equitable. Court orders are the gold standard: every state duty exemption accepts them, the ATO rollover applies to them, and they are final.
• A binding financial agreement. A private contract under Part VIIIA (married) or Part VIIIAB (de facto) of the Act. It binds only if each party received independent legal advice before signing, with a signed statement from each lawyer (section 90G, and section 90UJ for de facto couples). It is not reviewed by a court, which is its appeal and its risk: an agreement made without the formalities can be set aside.
• An informal agreement. A handshake, an email, a transfer signed at the bank. It divides the property but it does not end either party's right to apply to the court inside the time limit, it attracts no CGT rollover, and in most states it does not qualify for the duty exemption. It is the arrangement most separating couples start with and the one the professionals spend the next year unwinding.

If the parties cannot agree, either applies for property orders, and the court can order the house sold and the proceeds held and divided, or transferred to one party on terms. The court's Priority Property Pool list handles cases where the net pool excluding superannuation is under $550,000 on a faster track.

Stamp duty: the exemption in each state

Transferring the home from joint names to one former partner is a dutiable transaction that would normally cost tens of thousands of dollars. Two layers of law take that away when the transfer is done properly.

First, the Commonwealth. Section 90 of the Family Law Act says a deed or instrument "executed by a person for the purposes of, or in accordance with, an order made under this Part" is "not subject to any duty or charge under any law of a State or Territory", and section 90L extends that to a binding financial agreement and any instrument made under one (section 90WA does the same for de facto agreements). Then each state's duties Act adds its own exemption, which is what the revenue office actually processes.

• New South Wales (section 68 of the Duties Act 1997): no duty on a transfer of matrimonial or relationship property to the parties, either of them, their children or a trustee for the children, where it is effected by a binding financial agreement, a court order, an agreement the Chief Commissioner is satisfied was made to divide the property because of the breakdown, or a purchase at a public auction held to comply with such an order or agreement. NSW is unusual in accepting a documented private agreement. Duty already paid is refunded once the marriage is dissolved or the relationship has broken down.
• Victoria (section 44 of the Duties Act 2000): no duty where the Commissioner is satisfied the transfer "has been made solely because of the breakdown of a marriage or domestic relationship", the transferor is a party or a trust for a party, the transferee is a party, a dependent child, or a trust for them, and "no other person takes or is entitled to take an interest in the property under the transfer". Court orders or a financial agreement are the usual evidence.
• Queensland (section 424 of the Duties Act 2001): duty is not imposed "to the extent that it gives effect to a matrimonial instrument or de facto relationship instrument". The Queensland Revenue Office requires the sealed court order or financial agreement to pre-date the transaction, specify the property and say who receives it; a transfer of the principal place of residence after divorce proceedings have started also qualifies. Duty paid before an instrument existed can be reassessed within six months of the instrument being made (section 425).
• Western Australia (sections 128 to 131 of the Duties Act 2008): nominal duty of $20 on a transaction "in accordance with a matrimonial instrument or de facto relationship instrument", meaning a Family Law Act financial agreement or court order (or, for de facto couples, a Family Court Act agreement or order), where the parties are separated and the property goes to a party, a child or a superannuation trustee.
• South Australia (section 71CA of the Stamp Duties Act 1923): exempt where the instrument gives effect to a Family Law agreement or order, the marriage has been dissolved or the Commissioner is satisfied the marriage or de facto relationship "has broken down irretrievably", and the property passes between the parties and no one else. Duty paid earlier is refunded once that is established.

Tasmania and the territories have equivalent provisions, and the Commonwealth sections apply everywhere. The common thread: get the order or the binding agreement first, then transfer. A transfer done informally in the hope of fixing the paperwork later loses the exemption in Queensland, WA and SA outright, and depends on the Commissioner's discretion in NSW and Victoria.

Capital gains tax: the rollover, and what it does later

The ATO's relationship breakdown rollover applies when an asset is transferred between former spouses under a court order (including consent orders), an arbitral award, or a binding financial agreement. The ATO states the rule and its limit in one line: "The relationship breakdown rollover of CGT only applies if assets are transferred under a court order or other formal agreement." When it applies it is compulsory, not optional.

• The transferring spouse makes no capital gain or loss and simply reports the rollover in their return.
• The receiving spouse takes over the transferor's cost base and, in effect, their acquisition date: "you calculate your CGT as though you had owned it since your former spouse acquired it." A pre-1985 asset stays pre-CGT. The 12-month holding period for the 50% discount includes the former spouse's period of ownership.
• For the family home, the main residence exemption is then worked out across the combined period of ownership: for transfers after 12 December 2006, the property is fully exempt only if it was the transferor's main residence before the transfer, the transferee's main residence during their ownership, and never used to produce income. Otherwise a partial exemption applies, calculated on non-main-residence days over total ownership days, separately for the share you always owned and the share that rolled over. The ATO's worked example on a holiday house that became one spouse's home after the transfer shows how quickly that becomes arithmetic.
• The home-first-used-to-produce-income rule carries across too: if either spouse first rented the home out after 20 August 1996, the cost base resets to market value at that date, whoever owned it then.

Two consequences follow for the negotiation. First, an investment property carries its tax with it. A partner who takes the rental at an agreed value of $900,000 is also taking the capital gain that has built up since it was bought, and will pay the tax when they sell; the settlement should value it net of that latent tax, and the discount replacement for gains accruing after 1 July 2027 makes the arithmetic date-sensitive, as our explainer on the negative gearing and CGT changes now law covers. Second, informal transfers are taxed now. Divide assets by private agreement and the ATO treats the transfer as a disposal at market value, with any gain assessable to the transferor in that year.

If the home is sold rather than transferred, each owner declares their own share of any gain, usually covered by the main residence exemption if it was the family home throughout, and each needs their own clearance certificate from the ATO before settlement or the buyer must withhold 15% of that owner's share, a rule that has applied to every sale since 1 January 2025 and is covered in our guide to selling an investment property. A spouse who moves out and later sells their own new home should also know that the ATO allows spouses only one main residence between them for any period unless they nominate otherwise, so the choice of which home is "the" main residence for the months between separation and sale is worth making deliberately. Our CGT calculator runs the numbers.

Sell, or buy the other out?

The financial comparison is simpler than the emotional one.

• A buy-out costs a valuation, the refinance, conveyancing and $0 to $20 in duty. The staying partner must qualify for the whole loan on one income; lenders assess it as a new application, and the equity being paid out has to come from that loan or elsewhere. Our borrowing power and refinancing calculators show whether the numbers work before anyone promises anything, and the pre-approval guide covers getting the lender's answer in writing.
• A sale costs agent's commission, marketing and conveyancing, typically 2% to 4% of the price all in (see the cost of selling), plus the cost of two new homes. It produces a market price nobody can dispute, which is why courts default to it when parties cannot agree on value.

The value question drives both. For a buy-out the parties either agree a figure, obtain a joint valuation from a single valuer both instruct (the court's default where value is disputed), or each get agents' appraisals and negotiate between them. A written agent appraisal is free and quick, a valuation costs a few hundred dollars and carries weight; using both, and disclosing both, is normal. Our guide on preparing for an appraisal applies, with one difference: both owners should be present or both should receive the report.

Selling a home two people own

A jointly owned home needs both owners' signatures on the agency agreement and on the contract of sale, and both owners' clearance certificates at settlement. That gives either party a veto, which is why the sale is usually written into the consent orders or agreement with the mechanics decided in advance:

• the agent and the method, chosen jointly or by a stated process (each nominates two, the other picks one), with the agent instructed to report to both owners equally; our guide on choosing a selling agent covers the interview, and the agent's obligation to pass on every offer to every owner is the one to test;
• the reserve or asking price, and who decides if offers come in below it;
• who lives there and who pays what until settlement: the mortgage, rates, insurance and presentation costs, and whether the occupier pays occupation rent to the other;
• what happens to the proceeds: paid into the conveyancer's trust account and released per the orders, or, if orders are not yet made, held in trust pending them. Releasing money to each party before the settlement is final is how informal agreements become disputes.

Where one owner refuses to sign, the other's remedy is an order for sale; the court can appoint trustees to sell over a party's objection and direct how the proceeds are held. That is slower and more expensive than an agreed sale, which is the practical argument for agreeing the mechanics even when nothing else is agreed. Buyers will not know the sale is a separation unless the parties tell them, and there is no obligation to; an agent who lets it be known invites low offers.

The order of events that avoids most trouble

1. Full disclosure both ways, including the mortgage balance, any redraw and offset, and the title.
2. Value the home: agreed, joint valuation, or appraisals each.
3. Decide sale or buy-out, with the buy-out tested against a real lender.
4. Document the agreement as consent orders or a binding financial agreement, with the sale or transfer mechanics inside it.
5. Then transfer or list. The duty exemption and the CGT rollover follow the document, not the other way round.
6. Clearance certificates, refinance approval and the discharge lined up before settlement.
7. Diarise the time limit: 12 months from the divorce order, two years from a de facto separation.

The mistakes that cost separating couples money

• Transferring first, documenting later. Full duty in most states, CGT now, and a settlement either party can reopen.
• Taking the investment property at gross value. The rollover hands you the tax bill with the asset.
• Letting one partner's appraisal set the price. Disclosure is compulsory and a single expert is the court's default; a private appraisal is a negotiating position, not a valuation.
• Splitting the proceeds at settlement without orders. The money is spent; the claim is not extinguished.
• Missing the clock. Leave to apply out of time requires hardship, and is refused often enough that no lawyer relies on it.
• Two main residences. Each spouse claiming their own home for the same period without nominating; the ATO allows one between you unless you choose otherwise.
• Selling with a tenant, a co-owner and no plan. If the home is rented, the notice rules in our selling with tenants guide run alongside everything above.

Where this fits

Once the agreement is documented, the sale is an ordinary campaign run by two careful sellers. Our guide to how to sell a house in Australia covers it end to end, sell first or buy first covers the timing of the next home, and the state contract guides cover the paperwork. The sibling to this page for a death rather than a separation is our deceased estate guide. If you both want a written appraisal from an agent who sells in your suburb, request a free appraisal and ask that the report go to both of you.

Sources

• Family Law Act 1975 (Cth), sections 44 (time limits), 90 and 90L (instruments not liable to duty, quoted), 90G and 90UJ (binding financial agreements), 79 and 90SM (property orders); current consolidation on the Federal Register of Legislation.
• Federal Circuit and Family Court of Australia, Financial or property: overview (time limits, formalising agreements, considerations, quoted); Attorney-General's Department, Family law (property) changes from 10 June 2025: fact sheet for separating couples (four-step process, family violence, disclosure, quoted).
• Australian Taxation Office, Relationship breakdown rollover, How to calculate CGT on a rollover asset and Main residence exemption in relationship breakdown (all updated 22 June 2026, quoted).
• State duty: Duties Act 1997 (NSW) s 68; Duties Act 2000 (Vic) s 44 (authorised version 141, quoted); Duties Act 2001 (Qld) ss 424–425 and Queensland Revenue Office, matrimonial exemptions; Duties Act 2008 (WA) ss 128–131 (version 03-y0-00, 1 September 2026); Stamp Duties Act 1923 (SA) s 71CA. Read on the state legislation sites and AustLII, September 2026.
• Selling-cost percentages and valuation fee ranges are conventions from our cost-of-selling data, not rules.