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Scenario: Mary buys a property with Harry. Mary contributes $120,000 to the purchase price and Harry contributes $10,000.  They share in the home loan repayments and other outgoings and household expenses. After living together in the property for 10 years, they separate. Mary wants her initial contribution of $120,000 plus half the equity in the property. Harry says she can’t have her initial $120,000 back.  Harry wants all the equity in the property divided equally. Who is right? 

Answer: Unless Mary and Harry have a Contracting Out Agreement (Pre-nup) stating that Mary can have her initial $120,000 should they separate, then Harry is right, he can seek equal division of the equity in the property.

Under the Property (Relationships) Act, after 3 years living together, the equity in the family home is divided equally should a couple separate, regardless of how much each person contributed towards the purchase price and/or outgoings.

If you are in the process of purchasing a property with your partner/spouse and will contribute more to the purchase price, you may wish to consider entering into a Contracting Out Agreement so that should you separate, you may retain your initial contribution as your separate property. 

If you will be contributing not only a greater share of the purchase price but contributing more towards the payments of the home loan and other outgoings in relation to the property, you may wish to obtain a greater share of the property, proportionate to your contribution.  E.g. if you are contributing 80% of the purchase price and outgoings, you may wish to retain 80% of the equity in the property.

If you will be the only one contributing to the purchase price and outgoings, you may wish to ensure that the whole property remains yours should you separate.