Split up, now financially flying solo

Sounnds stressful. I would consider whether selling may be the best long term option. Take the pressure off yourself and find somewhere you and your kids can enjoy now. Maybe not the best financial decision but you will find other opportunities.

 

What's wrong with option 6 exactly? Did I read correctly that you essentially have $200k in savings? Wouldn't that last quite a while even if you ran a negative budget year after year?

 

(b) a de facto relationship can exist even if one of the persons is legally married to someone else or in another de facto relationship.
Interesting ...if you were in multiple defacto you could be either very well off or end up with nothing.

 

Build a 3 bedroom GF for $150,000, with an attached garage and "rumpus" room. That'll leave you $50k in the bank, plus comfortable living.

 

Still - 200K + "seems" pricey.. but as you have said, it may not be a straightforward build. Interesting to see what Councils says. Have you engaged any professional help? ie a town planner or architect familiar with inner city infill builds? That might cost 15-20K, but could also save you twice that again ....

 

Someone else mentioned that would be double the mother in laws to deal with.

 

There doesn't seem to be anything in there about a specific time?

Working out if persons have a relationship as a couple

(2) Those circumstances may include any or all of the following:

(a) the duration of the relationship;

Then it stops, so it goes so far as to say the duration is a factor but doesn't tell us what that duration is .

Or I am reading it wrong?

 

No, you are reading it correct, but there is another section regarding property settlements

s90SB
FAMILY LAW ACT 1975 - SECT 90SB When this Division applies--length of relationship etc.

 

Nice one thanks .

 

Nope you're correct. Its a myth that there needs to be a set length of time for a relationship to be deemed de facto.

What people are probably confused about is that generally there needs to be 2 years of a de facto relationship before family law property jurisdiction kicks in (in most circumstances, but with some exceptions).

The other thing that people get mixed up is that Centrelink has its own policy where they deem a couple who have lived together for 6 months or more to be de facto - which is something completely separate from the family law rules (usually).

 

There is also the death aspect as well. e.g. in a Family Provision claim in NSW, a defacto is an eligible person who can make a claim - no minimum time requirement either.
see SUCCESSION ACT 2006 - SECT 57 Eligible persons

 

specifics of defacto definitions aside,
does the law go the other way

property portfolio has dropped in value signficantly, so one party has to pay out the other when splitting,

or breadwinner had a succcessfull business, but business went very sour and is losing money every day or is not making any profits, so the other party has to pay support?

 

We were talking about property settlements and yes it can go the other way.
Spousal maintenance is a different aspect as well

 

Defacto is 2 years for non-centrelink requirements ... De Facto Relationships | Family and Divorce Lawyers

My concern is the borrowing for the property bought during the period you were together. There is no way a bank would lend to you individually if the repayments take up 78% of your disposable income.

Was your ex-partners income included in the calculation, are they a joint borrower/guarantor? If so, your borrowing situation has changed and you legally must let the lender know - which may force the sale of the property regardless

 

Thanks everyone for brainstorming this with me, I'm super appreciative for all the creative input.

This is something I hadn't thought of, yes I certainly could AirBNB entire dwelling and rent nearby, do the cleaning etc myself, as I will be attending the suburb most days anyway due to children schooling drop offs. However there is draft legislation to only allow 180 day airbnb entire property rentals per year in greater Sydney, which could put a dampener on that idea.

I can easily do that (cleaning and laundry).

This question may be more suited to your tax tip post but if I initially bought the property, rented it out, then moved in myself, then later rent rooms out while living in the property, or if I move out and completely rent out on AirBNB/as a 12 mth lease, how does that affect ongoing CGT? Is it not the case that my non-deductible costs build up and add to escalate the cost base?

Terry answered this nail on the head re defacto/property law...

Basically I have been living off dipping into offset account surplus funds, they didn't pay bills, minor contribution towards food. The loan met servicability requirements because the rent income as an investor loan added enough to my regular pay + ongoing yearly bonuses and I had a sizable deposit (>20%). But, obviously by moving in to the property my conditions have dramatically changed as that is an extra big chunk of income I no longer get.

I'd love to explore this more but I honestly can't understand financially the implications of this. But yes if I have 200k extra in offset to the loan amt, and I need an extra $2000 a month from that money to pay the repayments, then that money would last me 100 months or 8.3 years... but then after 8.3 years I have to hope to god my income has risen substantially to take over paying that $2000 a month I was dipping into advance payments, or will be forced to sell at that point (at least I guess HOPEFULLY the value has risen substantially - although so will have everywhere else!).

Council have given the verbal nod that they will consider my development. It's a separate title long narrow skinny block but has many site constraints, by boundary windows by a neighbour and also my dwelling, which council tell me they will not allow a negative impact on the amenity of either dwelling, as I could sell that block/development off separately at any time as it doesn't need subdividing because it is already its own independent title. There is also easement/BCA fire issues. The neighbour windows on a zero boundary build was probably done 70+ years ago back as that strip of land used to prior be a laneway, but was bought out by the previous owner of my property back in the 1950s. I'm not sure whether I can challenge council on that but it's going to be a long shot to build anything usable as the width is literally 2.5m if I have to move it back away from windows etc. It will be one of Sydney's most narrow houses, one just hit the market last week. Its actually not a secondary dwelling, but would be an individual single lot new dwelling. I also could sell this individual lot off, as is, or with a DA, or develop myself, live in etc - plenty of flexibility but heavily constrained.

Council suggest I get an architect/planner to produce drawings and then do a pre-da meeting with them and they are interested to see what I come up with. Not sure on costings of this or the actual construction whether it is achievable. Reconfiguration work would need to be done to my existing property to ideally remove windows from the boundary of one of my two titles so that the new infill dwelling didn't have to work around them in the design and only had the neighbours windows to consider. The block is 50m2 in total (2.5m by 20m length) FSR 1:1, R1 zoned, 9m height..

Terry, you are very knowledgable ! Spot on. Basically you can't make a property law claim for entitlement to assets if it is less than 2 years unless there is a child, registered relationship etc.

 

This is not necessarily the case. See subsection c) in that link

 

If it was rented out before you moved in it would be s118-185 which would apply and this would mean the 3rd element cost base expenses such as interest while living there could be used to reduce eventual CGT

 

Option 2 immediately - choose someone clean quiet and nice who is rarely home (FIFO, working student , someone who visits their partner, not the other way round)

Put $ from Option 2 towards GF since can’t move kids schools for 5-10yrs? Move in-out of GF depending on new life circumstances

Moving out would be good, unless: will child support go up? Still want to build GF (hard to do if tenants are there).

Bathroom Reno: may not increase Airbnb rent but may increase resale value or QOL. Tiny house with 2 growing kids

 

Although you mention lots of options, would this not be an easy way to reduce your debt/increase offset by a significant amount to ease the pressure?
If it is already on it’s own title (from my understanding of your comments) this should be an easy option as long as it doesn’t cause issues with your bank then looking at your loan, but worst case as they release the mortgage over title they may force you to pay down some of the debt. Some brokers could comment further & more accurately on this though.