A binding financial agreement can decide who keeps the family home by naming the property and setting out exactly what happens to it if the relationship ends.
It can quarantine a home one person brought into the relationship, fix a dollar figure or a percentage the other person receives, or require the house to be sold.
Once the agreement is binding and covers the home, a court cannot divide that property under section 79 of the Family Law Act 1975.
The catch is that a clause written today has to still make sense years later, after renovations, a refinance, a move and possibly a child.
Who Keeps the House Under a Binding Financial Agreement?
Whoever the agreement says keeps it, provided the agreement is binding and no ground exists to set it aside.
A binding financial agreement replaces the court’s discretion with your own bargain for the financial matters it covers, so the question stops being what a judge thinks is fair and becomes what the document actually says.
For the agreement to have that effect, both people must sign it, and each must receive independent legal advice before signing about how the agreement affects their rights and about its advantages and disadvantages.
Each lawyer must give a signed statement confirming that advice was given, and a copy has to go to the other party or their lawyer.
Those requirements sit in section 90G of the Family Law Act 1975, and an agreement that misses them can be attacked years later when the house is worth far more than it was.
A court can still declare an agreement binding where one of those steps was missed, but only where it would be unjust and inequitable not to, under section 90G(1A).
The section numbers used here are the ones that apply to married couples.
De facto couples outside Western Australia rely on the equivalent provisions in Part VIIIAB of the same Act, and de facto couples in Western Australia are covered by separate state legislation.
The stakes are high because the home is often the largest single asset in the pool.
The Australian Bureau of Statistics put the mean price of a residential dwelling in Australia at $1,100,400 in the June quarter of 2026.
The same agency recorded more than 49,000 divorces in 2025, with a median of 13.4 years between marriage and divorce, which is long enough for a modest first home to become the biggest number on the page.
How Can a BFA Deal With the Family Home?
There are four approaches that cover most agreements: quarantine the home, fix a payout, share a percentage of the equity, or require a sale.
The table below compares them across how each one works, who it suits, and where each one tends to fail.
| Approach | How it works | Who it suits | Main risk |
| Quarantine | The home is recorded as one party’s separate property and excluded from anything divided on separation. | One partner owned the house before the relationship, or a family gift paid the deposit. | Protection is harder to establish if the house is sold and the money is mixed with joint funds without a tracing clause. |
| Fixed payout | The person keeping the house pays the other a stated sum, often stepped up for each year of the relationship. | Shorter relationships and clear differences in what each person brought in. | A figure set today can look very small against the equity in the house a decade later. |
| Percentage of equity | The other party receives an agreed share of the net equity, worked out at separation. | Couples who buy, renovate and pay down the loan together. | Arguments about the valuation date and the valuer if the method is not written into the clause. |
| Sale and split | The house is sold within a set period and the proceeds are divided on a stated basis. | Jointly bought homes where neither person could carry the loan alone. | Neither person controls the market, and one of you may badly want to stay. |
The approach you pick matters less than the detail you put around it.
An agreement that says one party keeps “the family home” without identifying the title, the address and what happens if that property is replaced is an invitation to argue.
A clause that names the certificate of title, sets out how a later home is treated, and states how equity is valued gives both people the same answer years afterwards.
What Happens to the Mortgage if One of You Keeps the House?
Both of you stay liable for a joint home loan until the lender releases one of you, or the loan is refinanced or repaid, no matter what your agreement says.
A binding financial agreement is a contract between two people, and your lender is not a party to it, so it cannot release anyone from a debt owed to the bank.
A lender can agree to release or replace a borrower, and a court making property orders can direct a creditor to substitute one party for both in a debt, under section 90AE of the Family Law Act 1975.
That order is only available in court proceedings and is subject to conditions, so for people settling by agreement the refinance is the real test of whether one of you can keep the house.
A well drafted home clause sets a deadline for the refinance, requires the person staying to indemnify the other for the loan in the meantime, and says what happens if the bank refuses on serviceability grounds.
Without that fallback, the person who moved out can be stuck on a mortgage for a house they no longer live in and cannot borrow against.
Can a BFA Cover a Home You Have Not Bought Yet?
Yes, and this is one of the most useful things a pre-nuptial agreement can do.
An agreement made before marriage under section 90B of the Family Law Act 1975 can deal with property acquired during the relationship, including a house neither of you has seen.
The drafting will usually need to describe the property by class rather than by address, for example any property that becomes the parties’ principal place of residence.
The clause should also deal with where the deposit comes from, because that is often what the argument is about years later.
If one person contributes an inheritance or a parental gift toward the purchase, the agreement can record that contribution and set out how it is repaid or credited before anything is divided.
Does the June 2025 Family Law Reform Change Who Keeps the House?
Not if you have a binding agreement, because the reforms changed the rules a court applies when it divides property.
From 10 June 2025, the Family Law Act sets out a clearer step by step process for property settlement and requires courts to consider the economic effect of family violence on a party’s current and future circumstances, as the Attorney-General’s Department explains.
The same package added rules for companion animals and confirmed that the court makes an order only if it is satisfied the order would be just and equitable.
All of that applies when a court is deciding the outcome, which is exactly the situation a binding financial agreement is designed to avoid.
What the reforms did not do is change the core rules for financial agreements or the grounds for setting one aside, so the tests in section 90K remain as they were before June 2025.
When Can a Court Set Aside an Agreement About the Family Home?
A court can set aside a financial agreement under section 90K of the Family Law Act 1975, and the grounds are narrow.
They include fraud, which covers failing to disclose a material matter, an agreement that is void, voidable or unenforceable, and conduct in making the agreement that was unconscionable in all the circumstances.
They also include circumstances arising since the agreement was made that have made it impracticable to carry out, and a material change relating to a child that would cause hardship.
Establishing one of those grounds does not end the agreement automatically, because the court still decides whether to set it aside.
The best known example is Thorne v Kennedy [2017] HCA 49, where a woman with almost no assets signed an agreement four days before her wedding to a property developer worth about $18 million.
She was first told about the agreement roughly eleven days before the wedding, and was told the wedding would not go ahead if she did not sign.
The High Court set both agreements aside for unconscionable conduct, and a majority held they were also voidable for undue influence.
The pressure and the timing counted against the agreement, alongside her dependence on him, the absence of any real alternative and terms that heavily favoured one side.
What if the House Is Sold or Replaced Before You Separate?
An agreement that protects one specific property can become harder to apply, and in some cases impracticable to carry out, once that property is gone.
Section 90K(1)(c) allows a court to set aside an agreement where circumstances arising since it was made make it impracticable for the agreement, or a part of it, to be carried out.
A clause that quarantines a house at a named address, with nothing said about the next house, leaves an obvious gap once the couple sells and buys somewhere else, and whether that makes the agreement impracticable depends on what the rest of it says.
A tracing clause reduces that risk, because it follows the protected value out of the first property and into whatever replaces it, including any deposit paid into a jointly owned home.
Tracing also needs to deal with mixing, because a protected deposit that funds a renovation on a jointly owned house is far harder to identify a decade later than one that stays in its own account.
Can Children Change Who Keeps the House?
Children can, in limited circumstances, because section 90K(1)(d) allows a court to set an agreement aside where a material change in circumstances relating to the care, welfare and development of a child means the child or a parent with caring responsibility would suffer hardship.
This ground may be raised where one person kept the home and the other is left caring for children with very little.
In Daily & Daily [2020] FamCAFC 304, the Full Court held that hardship is assessed by comparing the position of the child or carer if the agreement stands with their position if it is set aside.
That comparison is the reason many agreements deal with the home differently once children arrive, either through a review clause or by giving the primary carer a right to occupy for a defined period.
Building that into the agreement may reduce the cost and the risk of arguing about it after separation.
What Has to Happen Before the House Can Change Hands?
A separation declaration has to be made before the property parts of a financial agreement take effect.
Section 90DA of the Family Law Act 1975 says that a binding agreement dealing with property in the event of the breakdown of a marriage is of no force or effect until that declaration is made.
The declaration is signed by at least one of the spouses and records that they have separated and are living separately and apart, with no reasonable likelihood of resuming cohabitation.
That requirement stops applying if the spouses divorce or if either of them dies, and federal de facto agreements have their own version of it in section 90UF.
Only after that step can the transfer, the refinance and the change of title proceed under the agreement.
Skipping it is a common and costly mistake, because the tax and duty concessions below depend on the agreement being effective.
Do You Pay Stamp Duty to Transfer the Home?
Usually not, where the transfer follows a relationship breakdown and the property goes to one or both of you or to your children.
Each state and territory has its own duty exemption for these transfers, and in New South Wales it sits in section 68 of the Duties Act 1997.
Revenue NSW confirms the exemption covers transfers made under a binding financial agreement under the Family Law Act 1975, alongside court orders and registered arbitral awards.
The exemption is not automatic, so evidence of the breakdown and a copy of the agreement have to be lodged with the transfer.
Rules and evidence differ between states, so check the position with the revenue office in the state where the property sits before you sign anything.
Does Capital Gains Tax Apply?
A transfer under a binding financial agreement can qualify for the relationship breakdown rollover, which disregards the capital gain or loss for the person transferring the property and passes the tax history to the person receiving it.
The Australian Taxation Office requires the agreement to be binding under sections 90G or 90UJ of the Family Law Act 1975, the parties to be separated with no reasonable likelihood of resuming cohabitation, and the transfer to be connected with the breakdown.
The same guidance is blunt about the alternative, because the rollover does not apply where a couple divides assets under a private or informal agreement.
That matters most for an investment property or a second home, where the tax on a transfer can be larger than the cost of getting the agreement right.
The family home itself may qualify wholly or partly for the main residence exemption, depending on who owned it and how it was used, and that gets complicated where one person moved out or the property was rented for part of the time.
What Happens to the House if One of You Dies?
A binding financial agreement continues to operate after a party dies and binds their legal personal representative, under section 90H of the Family Law Act 1975.
The way the title is held is a separate question, and it can produce a different result from what the couple intended.
Where a home is held as joint tenants, the survivor takes the whole property automatically on death, regardless of what any will says.
Couples who want the agreement to hold on death often sever the joint tenancy so the property is held as tenants in common in defined shares.
The agreement and the will need to be read together, because two documents drafted years apart can point in different directions.
What Should a Home Clause Actually Say?
A home clause works when a stranger reading it in ten years can identify the property, the entitlement and the timetable without asking either of you what you meant.
The clauses that survive tend to cover the same ground:
- The property identified by address and certificate of title reference, not by a description such as the family home
- How a replacement property is treated if this one is sold
- How initial contributions, including gifts and inheritances, are traced and credited
- The valuation method and the date equity is calculated
- A deadline for refinancing, an indemnity for the outgoing borrower, and a fallback if the refinance is refused
- Who pays the mortgage, rates, insurance and repairs between separation and settlement
Most of those points are straightforward to agree while you both want the same outcome, and costly to argue about afterwards.
It is also worth setting a review date, because an agreement written before children, a business or a much larger mortgage may no longer reflect either person’s position.
Need Help Deciding Who Keeps the House?
A binding financial agreement can settle who keeps the family home well before anyone needs the answer, but only if the clause identifies the property, deals with the mortgage and survives the changes that come with a long relationship.
As binding financial agreement lawyers, my law firm can draft an agreement that protects your home at a fixed fee agreed before the work starts.
Call 1300-529-888 to talk through your situation.
Frequently Asked Questions
Can a BFA stop my partner claiming any share of my house?
Yes, if the agreement is binding and identifies the property clearly. A binding financial agreement can record a home as one party’s separate property, which prevents a court dividing it under section 79 of the Family Law Act 1975 while it stands. Protection can fail if the house is sold and the money mixed with joint funds.
Does a BFA remove my name from the mortgage?
No. A binding financial agreement binds you both, not your lender, so both borrowers stay liable for a joint home loan until the lender releases one of them or the loan is refinanced or repaid. It should set a refinancing deadline, require the person keeping the house to indemnify the other, and provide for sale if the bank refuses.
Do you pay stamp duty when transferring the house under a BFA?
Usually not, where the transfer follows a relationship breakdown and the property goes to one or both parties or their children. Every state and territory has a duty exemption for these transfers, and in New South Wales it sits in section 68 of the Duties Act 1997. The exemption is not automatic, so evidence must be lodged.
Can a court still change who keeps the house?
Yes, but only on the limited grounds in section 90K of the Family Law Act 1975. These include fraud or non-disclosure, an agreement that is void or unenforceable, unconscionable conduct, an agreement that has become impracticable to carry out, and a material change relating to a child that causes hardship. Without one of those grounds, the court applies the agreement.
When can we actually transfer the house after separating?
Not until a separation declaration is made under section 90DA of the Family Law Act 1975, unless the spouses have divorced or one of them has died. The declaration records that you have separated and that there is no reasonable likelihood of resuming cohabitation. Only after that can the transfer, refinance and change of title proceed.