Property settlement worked example: valuing the pool and applying the section 79 steps

A property settlement starts with a balance sheet: every asset, super interest and debt of both parties, whoever's name it is in, valued at today's date. That net pool is then divided by applying the steps in section 79 of the Family Law Act 1975, as written into the Act from 10 June 2025: assess each party's contributions (including the effect of any family violence on their ability to contribute), consider current and future circumstances such as care of children, health and earning capacity, and check that the result is just and equitable. The answer is usually expressed as a percentage split, then turned into who keeps which assets and whether super is split. This guide works through one illustrative family from start to finish.

The percentages here are illustrative. No formula fixes the outcome, and similar facts can produce different results. Use the property settlement split calculator to test the dollar effect of different percentages.

The family (illustrative)

Sarah and James married in 2011 and separated in March 2025. They live in Brisbane and have two children, aged 9 and 12, who live mainly with Sarah. James earns $165,000 a year; Sarah works part-time and earns $48,000. James brought $120,000 of savings into the relationship. Sarah's parents gave them $60,000 towards the house deposit in 2013. In 2023 James lost $35,000 on online gambling.

Step 1: identify and value the pool

Points to note:

• Super is property for family law purposes and is included, at its value as assessed using the Family Law (Superannuation) Regulations methods where needed. See super splitting.
• Both sides must make full and frank disclosure (s 71B). Statements, tax returns and valuations come before negotiation.
• The gambling loss may be considered as material wastage under s 79(5)(d), either by "adding back" or as a factor in the adjustment. Courts approach add-backs cautiously.

Step 2: contributions

Over a 14-year relationship with children, courts often treat homemaker and parenting contributions as substantial, so early financial contributions carry less weight as time passes. An illustrative assessment: contributions 52/48 in James's favour, reflecting his larger initial contribution.

Step 3: current and future circumstances

Relevant factors in s 79(5):

• Sarah has the care of two children under 18 and the need to house them (s 79(5)(f)).
• A large gap in income and earning capacity (s 79(5)(c)).
• The duration of the marriage and its effect on Sarah's earning capacity (s 79(5)(o)).
• James's gambling loss as wastage (s 79(5)(d)).

An illustrative adjustment of 10% to Sarah. Combined result: 58/42 in Sarah's favour.

Step 4: just and equitable

The court checks the overall result. Would 58/42 leave either party unable to house themselves or the children? Is there anything else? Here the result appears just and equitable.

Converting the percentage into dollars

How they might achieve that:

• Sarah keeps the house, refinancing the $520,000 mortgage in her name: equity $630,000.
• Sarah keeps her super ($88,000) and car ($18,000): total $736,000, which exceeds her $626,400 entitlement by $109,600.
• James keeps his super ($265,000), shares ($42,000), car ($35,000), the bank accounts ($14,000) and his credit card debt (−$12,000): $344,000. To reach his $453,600 entitlement, Sarah pays James $109,600, for example by borrowing more against the house.
• If Sarah cannot borrow that much, the parties may have to sell the house or agree a different mix of assets. A super split is often part of that mix: had Sarah kept less house equity, she could instead have received part of James's $265,000 super.

Many settlements trade super against house equity, but $1 of super is not the same as $1 of cash: super is preserved until retirement, and the house has selling costs and stamp duty consequences. Lawyers often account for these differences.

The cost side

Use the calculator with the pool of $1,080,000, James's share of 42% and Sarah's own legal costs of $20,000 (illustrative): James receives $453,600, and Sarah's share is worth $606,400 after her costs. If Sarah pursued 60/40 at trial and spent an extra $60,000 to get there, her 2-percentage-point gain ($21,600) would cost almost three times as much. This is why most cases settle at mediation, after family dispute resolution or a conference.

Formalising the outcome

• Consent orders filed with the Federal Circuit and Family Court of Australia, including any super splitting order. The court checks the orders are just and equitable. See divorce and consent orders steps.
• Or a binding financial agreement, with independent legal advice for each party.
• Transfers between spouses under a family law order or agreement are generally exempt from transfer duty in each state, and CGT rollover relief usually applies to transfers between spouses (s 126-5 ITAA 1997), but check conditions.

FAQ

Is the start point 50/50?

No. There is no presumption of equal division. Many outcomes are near 50/50 for long relationships with equal contributions, but the steps can lead anywhere.

Are inheritances and gifts included?

Property received by either party, before or after separation, is generally in the pool and the source is weighed as a contribution. Timing matters: an inheritance received long after separation may be treated differently.

What if one party hides assets?

Breaching the duty of disclosure can lead to adverse inferences, costs orders and orders being set aside. Subpoenas can be used to get records.

Do we have to go to court?

No. Most property settlements are agreed and formalised by consent orders without a hearing.

Sources

• Federal Register of Legislation — Family Law Act 1975, ss 71B, 79; Income Tax Assessment Act 1997, s 126-5
• Federal Circuit and Family Court of Australia — property and financial matters, consent orders
• Family Relationships Online — family dispute resolution
• Related: 2025 property changes, checklist, missed time limits