Moving in Together? Things to Consider

When you move in with your partner, your relationship status suddenly changes – you are now classed as being in a “de facto” relationship.

In Australia, this triggers the application of certain laws which may not have otherwise applied. It is important to consider the effect of these laws, and what they mean to you as a couple, before taking the plunge and moving in together.

Knowing what these laws mean can help you navigate the financial issues that are part and parcel of sharing a home, enabling you to take an active and involved role in your financial future as a couple.

Thinking about moving in together?

The savings on living expenses can be a big draw card for couples considering moving in together. Having the rent, utilities and other expenses halved can mean big savings.

However, you don’t want to lose out in the long run with unintended consequences flowing from cohabitation.

Other Resources

De facto Relationships in Australia

Financial Agreements for de facto couples living together

Financial Agreements for de facto couples planning to live together

The law now grants de facto couples rights comparable to those of married couples. This includes the right to apply to the Court within two years after the end of the de facto relationship in relation to issues such as the division of property and spousal maintenance. The de facto relationship must have been for a period of at least two years in order to apply.

How should you prepare?

Being prepared for the more practical issues relating to cohabitation means taking the time to discuss how you envision your finances operating before you move in together.

Disputes over financial issues can be a major romance buster for couples who have moved in together. Whether you are financially compatible or not (are you a saver while your partner is a spender) can have a big impact on a relationship.

This means everything from the everyday expenses such as the rent and utilities to the more significant assets and debts such as property and home loans, whether jointly or separately owned.

Effective communication ensures are on the same page concerning property and financial issues and helps to prevent misunderstandings and conflict in the future.

How will your assets be affected?

Being aware of how the laws apply to defacto relationships allows you to plan ahead and decide what will happen to your assets and liabilities – whether they are owned singly or jointly within the relationship.

As often is the case these days, you may both have already acquired sizeable assets (and/or liabilities) separately, prior to moving in together. You may decide to “quarantine” these assets from assets that may be accumulated together in the future which you may agree are shared.

Whatever you decide to do, consider putting your Agreement in writing and in a form that is legally binding – especially where you have substantial assets involved.

The Family Law Act enables couples to make legally binding Agreements, called Financial Agreements, which are recognised by the Courts.

These Agreements are a way of recording how a couple has agreed to deal with their assets (e.g. property) and liabilities (e.g. mortgages) in the event that their relationship comes to an end, in a way which is legally binding. Financial Agreements help to avoid disputes or even potential court proceedings, by addressing these issues.

The bottom line…

Communicate with your partner.

Don’t enter blindly into a de facto relationship and assume financial issues will magically work themselves out once you’ve moved in together. If you aren’t both in agreement as to how the bills, mortgage or rent will be paid, and your assets or debts managed, then you may find that the honeymoon period will quickly wear off.