Many separating couples assume the family home is the main asset in a property settlement. In practice, investment properties are treated as part of the asset pool and are handled in the same way as any other property the parties own.
The Federal Circuit and Family Court of Australia requires both parties to identify and disclose all assets and liabilities, including investment properties, whether they are in one person's name, held jointly, or owned through a company or trust. From there, the process works through contributions, future circumstances and what a just and equitable division looks like on the facts.
Brookwater Legal helps clients across Greater Springfield and Ipswich with property settlements, including matters involving investment properties and more complex asset pools.
Here is how investment properties are generally handled in a Queensland property settlement, and what the process involves.
Key takeaways
- Investment properties form part of the asset pool in a property settlement.
- There is no formula for dividing property under the Family Law Act.
- Both parties must disclose all assets, including properties held in a company or trust.
This article is general information only and is not legal advice. Every situation is different, and you should speak with a solicitor about your own circumstances.
Are investment properties included in a Queensland property settlement?
Investment properties are included in the asset pool in a Queensland property settlement, according to the Federal Circuit and Family Court of Australia. It does not matter whose name the property is in, when it was bought, or whether it was purchased before or during the relationship. The Court identifies all property and liabilities of both parties before deciding how they are divided.
Legal Aid Queensland confirms that property includes assets and liabilities owned individually, jointly, or through a family trust or family company. The Court generally assesses contributions against the whole pool rather than going asset by asset, particularly in longer relationships.
What information about an investment property needs to be disclosed?
Full disclosure is required from the start of any property settlement process, according to the Federal Circuit and Family Court of Australia. For an investment property, this typically covers:
- › Title and ownership: how the property is held, including any mortgage, caveat or encumbrance.
- › Financial records: the three most recent tax returns and notices of assessment, and recent business activity statements where a party runs the property through a business structure.
- › Trust or company interests: where an investment property is held in a company or trust, the financial statements, company constitution or trust deed must also be provided.
- › Any disposals: property sold, transferred or gifted in the year before separation, or since separation, must be disclosed if it may affect the settlement.
Where the value of the investment property is not agreed, Legal Aid Queensland notes that a sworn valuation from an independent assessor is generally needed if the matter proceeds to a final trial.
How does the Court decide how to divide an investment property?
There is no formula for dividing property in a settlement, according to the Federal Circuit and Family Court of Australia. The Court works through four broad considerations on the facts of each case.
The Court considers the following:
- › What each party contributed: direct financial contributions such as the deposit, mortgage payments and purchase costs; indirect financial contributions such as gifts or inheritances used toward the property; non-financial contributions such as managing the property or carrying out renovations; and contributions to the welfare of the family generally.
- › Future circumstances: each party's income, earning capacity, age, health, care of children and the length of the relationship.
- › Wastage: any material wastage of property or financial resources caused intentionally or recklessly by a party must be taken into account under the Family Law Act.
- › Economic effects of family violence: where relevant, the economic effect of family violence must be considered, according to the Federal Circuit and Family Court of Australia.
The Court must be satisfied that any order is just and equitable before making it.
When does a property held in a company or trust get included?
An investment property held in a company or trust a party owns or controls is still part of what must be disclosed, according to the Federal Circuit and Family Court of Australia. This is one of the most commonly misunderstood aspects of a property settlement: the name on a title does not decide whether an asset is considered.
Legal Aid Queensland confirms that property includes assets owned through a family company or family trust. Where the interest in the trust is discretionary, it may be treated as a financial resource rather than property that can be divided directly, but it can still be taken into account in how the overall pool is divided.
Where a property is in a trust, the trust deed must be provided as part of financial disclosure. A party involved in a company must also provide recent financial statements, and a company search showing its directors, shareholders and constitution.
"There is no formula for dividing an investment property in a settlement. The Court works through contributions, future circumstances and what is just and equitable on the facts of each case."
Jade Kickbusch, Principal, Brookwater Legal
How does a property settlement involving an investment property generally work?
Our conveyancing and property team works alongside family law matters to help clients in Greater Springfield and Ipswich understand the full picture when investment property is involved. Here is how the process generally works.
Step 1: Talk to us
Get in touch and we will explain how the property settlement process works and what the involvement of an investment property means for the overall approach.
Step 2: Identify and value the asset pool
We work with you to identify all assets, liabilities and financial resources, including any investment properties, and gather the financial records and valuations needed to support disclosure.
Step 3: Consider contributions and future circumstances
We advise on how the contributions each party made to the investment property and to the relationship more broadly are assessed, and what future factors the Court or a negotiation process takes into account.
Step 4: Formalise the outcome
Where agreement is reached, it can be documented through consent orders or a financial agreement. Consent orders are filed with the Federal Circuit and Family Court of Australia and are legally binding once the Court is satisfied they are just and equitable.
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When does dividing an investment property not apply in a settlement?
Not every separation involves the court deciding what happens to an investment property. In many cases, the parties reach an agreement themselves or through their solicitors, and that agreement is then formalised through consent orders or a financial agreement without the Court making a determination.
Where parties have documented their intentions before or during the relationship in a financial agreement made under the Family Law Act, that agreement may set out how an investment property is dealt with. For an agreement to be binding, each party must have received independent legal advice from an Australian lawyer before signing, and each must have been given the lawyer's signed statement that the advice was provided.
The Family Law Act's time limits also apply. Married couples generally have 12 months from the date the divorce order takes effect to apply for property orders, according to the Federal Circuit and Family Court of Australia. De facto couples generally have two years from the breakdown of the relationship. Applications made after those periods need the Court's permission, which is not automatically granted.
What are the common misunderstandings about investment properties in a settlement?
One of the most frequent misunderstandings is that a property held in one person's name, or bought before the relationship, is automatically kept by that person. That is not how the Family Law Act works. The Court identifies all assets regardless of whose name they are in, and initial contributions are weighed against contributions made throughout the relationship.
Another common assumption is that rental income during the relationship has no bearing on a settlement. In practice, income paid to or received through a related entity, such as a family trust or a company, must be disclosed, and how that income was used or applied can affect how contributions are assessed.
Frequently Asked Questions
Is an investment property always split 50/50 in a Queensland property settlement?
There is no presumption of equal division, according to the Federal Circuit and Family Court of Australia. The Court weighs contributions and future circumstances on the facts of each case.
Does an investment property bought before the relationship get included in the asset pool?
Generally yes, according to Legal Aid New South Wales. The Court can make orders about any property regardless of when it was acquired, though property owned before the relationship is treated as a contribution by the person who brought it in.
What happens to the rental income from an investment property during a settlement in Queensland?
Each party must disclose all sources of income, including rental income, according to the Federal Circuit and Family Court of Australia. How that income was used or directed may be relevant to how contributions are assessed.
Can an investment property held in a trust be included in a Queensland property settlement?
Property owned through a trust a party owns or controls must be disclosed, according to the Federal Circuit and Family Court of Australia. A discretionary trust interest may be treated as a financial resource rather than divisible property, but it can still be taken into account.
How is an investment property valued in a Queensland property settlement?
If the parties cannot agree on a value, Legal Aid Queensland advises that a sworn valuation from an independent assessor is generally needed where the matter proceeds to trial. The Court takes market value at the time the case goes to court.
Do you need a solicitor for a property settlement involving an investment property in Springfield or Ipswich QLD?
Legal advice is not required before entering into consent orders, but the Federal Circuit and Family Court of Australia recommends independent legal advice about the effect of proposed orders. Where an investment property or trust is involved, the asset pool is more complex and a solicitor can help ensure full disclosure and a properly documented outcome.
Is transfer duty payable when an investment property moves from one party to the other in a Queensland settlement?
A transfer that gives effect to a court order or financial agreement made under the Family Law Act is generally exempt from transfer duty, according to the Queensland Revenue Office. The sealed order or agreement must pre-date the transaction and specify the property.
Your Next Steps
Investment properties add a layer of complexity to a property settlement, particularly where they are held in a company or trust structure, or where rental income or mortgage arrangements have changed since separation. Getting the disclosure and valuation right from the start, and understanding how contributions across the whole relationship are assessed, can make a significant difference to how a settlement unfolds for families in Springfield, Ipswich and across Greater Springfield.
Every property settlement matter is different, and that's exactly why it's worth a conversation. Make an appointment with the Brookwater Legal team or call (07) 3437 8555.
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External Resources
- Federal Circuit and Family Court of Australia - Financial or property overview
- Federal Circuit and Family Court of Australia - Financial or property: We cannot agree
- Legal Aid Queensland - Dividing your property fairly
- Federal Circuit and Family Court of Australia - Financial or property: We have agreed
- Queensland Revenue Office - Matrimonial transfer duty exemptions
Brookwater Legal · This article contains general information only and does not constitute legal advice. It does not take into account your individual circumstances. You should obtain legal advice about your own situation before acting on anything in this article. Liability limited by a scheme approved under Professional Standards Legislation.
