Buying out your ex's share of the family home

How a buy-out works

In a buy-out, one partner takes full ownership of the home and the other receives value in return. That value is most often a cash payment funded by a new loan, but it can also be a larger share of superannuation, savings or other assets. Because the home is usually the biggest asset, how you handle it shapes the whole property settlement.

The Family Law Act 1975 does not set a fixed percentage for who gets what. The outcome depends on contributions, future needs and what is fair overall. A buy-out is therefore not "half the house value": it is whatever share of the entire pool you agree (or a court would order) is yours, paid in the form that works. Our guide to what is in the property pool explains how that pool is built.

Common ways to structure a buy-out

Structure	How it works	Best suited to
Cash payout via refinance	Staying partner borrows to pay out the other's share	Strong income, equity in the home
Asset offset	Staying partner keeps the home; leaving partner takes more super or savings	Limited borrowing capacity
Staged payout	Payment over an agreed period, often secured by a charge	Temporary cash-flow gap
Deferred sale	Home kept until a trigger (children finish school, a set date), then sold	Young children, stable housing priority

Agreeing what the home is worth

Almost every dispute about a buy-out starts with the number on the house. The person staying tends to hope it is low and the person leaving hopes it is high, so agreeing a method is more productive than arguing about the figure.

The most reliable approach is a written valuation from an independent registered valuer, jointly instructed so neither side can say it was chosen to suit the other. Appraisals from real estate agents are cheaper and quicker, and many couples take two or three and average them. A desktop valuation is often enough for an agreement between cooperative parties, while a full inspection valuation is stronger evidence if the deal is later tested. The fees are usually shared, and a valuer's report is typically a modest cost compared with the sums involved.

Agree the valuation date too. Property markets move, and a figure from six months ago may no longer reflect reality when the deal is signed. Parties who have FCFCOA duty of disclosure obligations in mind tend to settle faster, because both sides lay out their numbers openly.

Working out the payout figure

Start with the whole pool: the home, super, savings, vehicles, investments and any business interests, minus debts. Then agree the percentage split, and subtract the value of what each person already takes. The difference is the balancing payment.

Worked example: a buy-out within the whole pool

Item	Value
Family home (agreed valuation)	$900,000
Mortgage	−$400,000
Superannuation (combined)	$250,000
Savings and vehicles	$50,000
Net pool	$800,000
Agreed split 55 / 45 in favour of the partner staying	$440,000 / $360,000
Staying partner takes the home (net $500,000 equity)	Owes a balancing payment of roughly $60,000 less any offset in super or savings

Notice that the staying partner may owe far less than "half the equity", because the other person can take a larger share of super or savings. That flexibility is why a buy-out should be negotiated alongside the rest of the settlement. Our property settlement mediation guide shows how couples work through these trade-offs in one session. The figures above are illustrative only.

Refinancing and removing your ex from the loan

A promise to pay does not release your ex from the mortgage. Their name stays on the loan until the lender agrees to remove it, which usually means the staying partner must refinance in their sole name. Lenders assess the application on that person's income alone, so check borrowing capacity before you agree to a figure. MoneySmart (ASIC) publishes independent tools for estimating repayments and understanding home loan costs.

Speak to a mortgage broker or your lender early and ask for a written indication of how much they would lend. Lenders may count child support and spousal maintenance as income in some cases, but policies vary. If the answer is "not enough", you still have options: a larger offset from other assets, a longer timeframe to refinance, or a staged payout.

• Set a firm refinance deadline in the agreement, for example 90 or 120 days.
• Decide who pays repayments, rates and insurance until the new loan settles.
• Agree what happens if the lender declines: usually a listing for sale by a set date.
• Budget for discharge fees, legal costs and any break costs on a fixed-rate loan.

Stamp duty and capital gains tax

Transferring a title can trigger stamp duty (transfer duty), but most states and territories provide a concession or exemption when the transfer is made under a family law agreement or court order following a relationship breakdown. The rules, forms and conditions differ between jurisdictions, so check with your state revenue office before relying on a concession, and note that the transfer often needs to be backed by consent orders or a financial agreement.

On the tax side, the Australian Taxation Office offers a capital gains tax rollover for assets transferred between spouses or de facto partners because of a relationship breakdown, which defers the gain rather than removing it. The home you live in is often exempt from CGT anyway, but investment properties and holiday homes are different. Tax advice from an accountant is worth the fee.

Typical costs of a buy-out (illustrative ranges)

Cost	Typical range	Who usually pays
Independent valuation	$400 – $900	Shared
Mortgage discharge and establishment fees	$500 – $1,500	Staying partner
Conveyancing / title transfer	$800 – $2,000	Often shared or by agreement
Consent orders (legal drafting plus filing)	Varies by provider	Shared

Ranges are indicative and vary by state and provider. Confirm current fees with your valuer, lender and state revenue office.

Making the buy-out legally binding

An agreement shaken on at the kitchen table is not enough. Without formal orders, your ex could still change their mind, and a title transfer may not attract stamp duty relief. There are two main routes. Consent orders are filed with the FCFCOA consent orders registry and, once made, have the force of a court order without a hearing. A binding financial agreement is a private contract, with each party receiving independent legal advice.

Time limits matter. Generally, you must start property proceedings within 12 months of a divorce becoming final, or within two years of a de facto separation, unless the court gives permission. Do not let a handshake deal run past those dates. See our property settlement timeline for the typical sequence.

When a buy-out isn't realistic

A buy-out is not always the right answer. If neither partner can afford to refinance, or the home is the only significant asset and keeping it would leave the other with nothing, a sale may be fairer. Selling is not a failure: it can free both people to start over. Our guide on selling property during a divorce covers that path, and who stays in the house deals with the period before settlement.

Mediation may also be unsuitable where there is family violence or serious safety concerns. If that is your situation, call 000 in an emergency, or 1800RESPECT (1800 737 732) for confidential support via 1800RESPECT, and seek legal advice before any negotiation. Exemptions to compulsory dispute resolution can apply, as explained in our guide to domestic violence and family law.

Where it is safe to proceed, mediation is usually the smarter first step. Court has its place, but it is rarely the best place to start a conversation about who keeps the home.