How the New Property Settlement Laws Impact Families and Their Future Homes
On 10 June 2025, sweeping reforms were introduced to Australia’s family law framework, specifically targeting how property is divided following separation or divorce.
These changes aim to bring greater structure, accountability, and fairness to property settlements—particularly for families with children or complex asset portfolios. If you’re navigating separation or supporting a friend through it, these updates are worth understanding. Our role as your legal partner is to guide you through these changes with clarity, strategy, and compassion.
Let’s explore what each of these changes means for you in practical terms.
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Key Takeaway:
Strategic Planning Now More Important Than Ever
These reforms represent a significant evolution in family law—placing children’s welfare, fairness, and accountability at the centre of property settlements. For many of our clients, this means a more structured and child-focused negotiation, often through mediation or out-of-court agreements.
A Structured Framework for Property Division
The Family Law Amendment Act 2025 has introduced a more consistent and transparent structure for assessing how assets should be divided after separation. While courts previously used a four-step model, this reform provides a clearer roadmap for outcomes.
We’re seeing:
- A legislated sequence for assessing contributions, liabilities, and future needs
- Greater recognition of non-financial contributions like caregiving and homemaking
- Clearer statutory principles to reduce uncertainty and inconsistency
Why does this matter to you? It offers more predictability, especially if you’re negotiating a settlement outside of court. It gives structure to discussions and allows everyone to work from the same playbook.
Here’s an example: If you stepped back from your career to raise children while your partner worked full-time, your caregiving contributions are now given stronger legal recognition. This can make a meaningful difference to your final outcome.
Asset Wastage Now Carries Consequences
This reform brings important protection to people who have been left out of financial decisions or treated unfairly during separation. Courts must now take into account whether either party has wasted or deliberately reduced joint property.
What this means in practice:
- Reckless spending, gambling losses, or unauthorised asset transfers can be challenged
- The court can “add back” the value of wasted assets into the shared pool
- Greater transparency is now expected of both parties after separation
Let’s look at a real-world scenario: If your former partner drained joint accounts, transferred property to relatives, or made large cash withdrawals, the court may consider that wastage and adjust the settlement in your favour.
Children’s Housing Needs Are a Legal Priority
This is perhaps the most important shift for families. For the first time, the law requires courts to prioritise the housing needs of children when making property settlement decisions. It’s a shift that recognises the real-life impact of separation on children and aims to protect their stability.
The law now:
- Focuses on maintaining stable and secure housing for children
- Recognises that the parent with primary care may need a larger share to support the family home
- Encourages arrangements that minimise disruption to school, community, and routine
Here’s how this plays out: If you care for your children most of the time and staying in the family home helps maintain their stability, this will carry more legal weight when property is divided.
Frequently Asked Questions (FAQs) on Property Settlements
How is property divided in 2025 under the new structure?
Even though there’s now a more defined structure, property division isn’t automatically a 50/50 split. Courts still consider your contributions, earning capacity, and what you’ll each need in the future. This framework simply ensures those factors are looked at more consistently.
What kind of behaviour counts as asset wastage in a property settlement?
Examples include excessive spending, gambling, selling joint property without consent, or hiding money. Courts now take this more seriously, and there are ways to prove it with the right financial evidence.
My partner handled all the finances. What if I don’t have access to the records?
That’s a common concern. We work with clients to trace transactions, request financial disclosures, and build a case if there are signs of financial misconduct.
I share care of my children. How does the new law treat our housing situation?
Even in shared care situations, the court will look at both parties’ housing plans and financial ability to provide a stable home. The key is whether each arrangement meets the children’s needs without unnecessary upheaval.
Can the house still be sold if there are children involved?
Yes, but only if it doesn’t compromise the children’s housing security. Courts will want to see a clear, practical plan for where the children will live and how their day-to-day life will be affected.
Ready to Navigate the Changes?
We’re here to ensure your property settlement is not only legally sound but also practical and aligned with your long-term goals. Our team at Village Family Lawyers offers clear legal guidance with compassion and discretion, supporting you every step of the way.
We have extensive experience in guiding clients through complex property settlements, always with a preference for mediation and practical resolution over litigation. Whether your circumstances involve business interests, trusts, or simply the need to ensure stability for your children, we’re here to help.
Our offices are conveniently located in Mt Eliza and Malvern, and we also offer online consultations to suit your schedule and location.
Ready to take the next step? Book a free 15-minute discovery call to explore how Village Family Lawyers can support your property settlement.
Call us today on 1300 413 997 or visit our website to make a time that suits you. Let us help you move forward with clarity and confidence.
