The legal term ‘de facto’ is very relevant in property transactions in Australia but is sometimes misunderstood.
In most States where first time home buyers stamp duty concessions are available (e.g. New South Wales and Queensland), you cannot apply if your spouse or de facto partner has already owned a property.
Similarly, the various Commonwealth first time home buyer initiatives (like the First Home Guarantee and the First Home Owner Grant) are only available to you if you, your spouse or your de facto partner has not already owned a property.
There are various other references in the State duties legislation to ‘de facto’, some of which actually allow you, in specific circumstances, to transfer all or part of a property to your de facto partner or former de facto partner without paying stamp duty.
So what does ‘de facto’ actually mean?
Defining a De Facto Relationship
Generally speaking, the various State Revenues adopt the definition of de facto relationship as it is defined in the Family Law Act 1975 (Cth) (the Family Law Act) i.e. a relationship where a couple lives together on a 'genuine domestic basis.'
This definition is inclusive of both same-sex and opposite-sex couples, as long as they are not married to each other.
Several factors help determine if there is a ‘genuine domestic basis’, such as:
- The length of time spent living together
- Financial dependency or sharing of finances
- Joint responsibility for children
- Sexual relationship
- Public recognition of the relationship as a couple
Is there a time Requirement for De Facto Relationships?
A de facto relationship is typically acknowledged if the couple has cohabited continuously for at least two years. However, there are exceptions, including:
- Couples with a child together
- Couples who jointly purchase property and live together before two years
- Couples who live together and share substantial financial responsibilities
That said, the Duties Act 1997 (NSW) does appear to cut across this in its own definition of ‘de facto partner’ which defines this as someone who has been a party to a ‘de facto relationship’ for a period of not less than 2 years. (Note that it adopts the Family Law Act definition of ‘de facto relationship’, however)
It is important to note, however, that just because people have lived together for two years, it does not automatically create the legal status of de facto.
Also, at this stage, the law does not appear to have recognised ‘thruples’.
Registering a De Facto Relationship
There’s no legal necessity to register a defacto relationship, but doing so can offer advantages, such as receiving a relationship certificate that functions like a marriage certificate for governmental purposes, Centrelink benefits, and tax or superannuation benefits.
You can register a de facto relationship in several Australian states and territories through their respective Registry of Births, Deaths, and Marriages.
Conclusion
Generally in property law, de facto couples are treated no differently from married couples in terms of what rules apply and what exemptions are available. However, whether or not a particular couple is deemed ‘de facto’ is not necessarily a straightforward thing and depends on whether the relationship has a ‘genuine domestic basis.’
