Navigating tax obligations as a de facto couple can feel tricky, but at Pisani Group, we’re here to make it straightforward. Even if you’re not married, living with your partner in a genuine domestic relationship means the ATO considers you a “spouse” for tax purposes. That has important implications for what you report and how your tax liabilities are calculated.
When Is a Partner Treated as a Spouse for Tax?
Under Australian tax law, your de facto partner is treated as your spouse if:
You live together on a genuinely domestic basis, and
You’re in a committed relationship.
This applies regardless of gender, duration of the relationship, or legal registration. Once these conditions are met, the ATO requires you to include key details about your partner on your individual tax return.
What Partner Details Must Be Shared (and Why)
You’re still lodging an individual return—but the ATO asks for your partner’s details to assess certain tax rates, entitlements and charges:
Name, date of birth, relationship dates
Income: salary, wages, interest, dividends, rental income, foreign income, pensions, trust distributions.
Reportable super contributions, fringe benefits, investment or rental losses
Child support payments, and more.
Providing these ensures the ATO can correctly calculate:
Medicare Levy Surcharge thresholds
Private health insurance rebate eligibility
Seniors and pensioners’ offsets
Family Tax Benefit and childcare subsidy eligibility
Failing to include your partner’s information or estimating poorly can lead to amended returns or penalties, so accuracy (or a reasonable estimate if uncertain) is key.
Real-World Impact for De Facto Couples
Medicare Levy Surcharge (MLS): This extra levy applies if your combined income exceeds the family threshold (around $180,000, increasing for additional children). Without private hospital cover, you may face a higher tax bill.
Private Health Insurance Rebate: Eligibility is based on family income—not individual—so your rebate could change once your de facto status is declared.
Spouse Tax Offset: If one partner earns little or nothing, the higher-earning partner might claim a small offset, easing their tax burden.
Capital Gains Tax (CGT): If both partners own separate properties, only one can be treated as the main residence for CGT exemption. On sale of the other, CGT may apply.
Income Splitting Opportunities: Where legal, shifting investments or income-generating assets to the lower-earning partner may lower the couple’s overall tax liability, but must be done prudently.
Expert Tips
Declare your partner accurately. Even reasonable estimates are better than omissions—ATO compliance systems are increasingly data-matched.
Review your combined income thresholds. Especially for MLS and private health rebates. Consider whether holding private hospital cover is financially sensible.
Reassess CGT strategies. If property ownership is involved, plan which home qualifies for the exempt main residence.
Explore offsets and splitting options strategically. With guidance, you may legitimately reduce your overall taxable income.
Document everything. Keep relationship and financial details well-organised in case the ATO requests verification.
At Pisani Group, we specialise in tax advice that supports your real-life circumstances—not hypothetical scenarios. Our approach includes:
Clear, empathetic guidance for couples entering de facto relationships
Proactive tax planning to mitigate risk (and take advantage of opportunities)
End-to-end support, including lodgement, reporting, and benefits optimisation
Are you navigating tax as a newly recognised couple? Let us guide you to clarity.
Contact Pisani Group today for tailored advice that ensures you and your partner stay compliant, confident, and financially optimised together.
