The Property (Relationships) Act 1976 (“PRA”) sets out the rules for how couple’s property is dealt with. The PRA applies to couples who are married, or
in a civil union, or de facto relationship, a category which includes couples who don’t live together.
The PRA divides property (which includes assets and liabilities) into relationship property, which is most often shared equally by the partners and separate
property, which is solely owned by one partner. There is no middle state under the PRA for relationship property and usually relationship property
is divided equally regardless of contributions. The default position is that property acquired during the relationship or separate property that is
used during the relationship is relationship property. For example, if Alice buys an investment property during her relationship with Bob, it is relationship
property. If Alice buys a property before the relationship from her own money but Alice and Bob live in the property together, it is relationship property.
Furthermore, if separate property is intermingled with relationship property or if the other partner carries out work on the separate property, the separate
property becomes exposed to a relationship property claim. For example, if Alice purchased an investment property before she met Bob, but uses her
income to pay the mortgage, Bob could make a claim against Alice for a half share of the amount that she paid and possibly claim a portion of any increase
in value if it can be linked to the application of Alice’s income.
As you can see from the above examples, relationship property is a very complex area that is very dependent on the particular circumstances of your relationship.
However, there are a number of steps you can take to give yourself certainty.
