03 Apr 2022

How Does the ATO Define Spouse?

ATO and Spouse

The definition of spouse matters in some realms including legal, financial, and taxes. The Australian Taxation Office has set criteria for the definition. Since claiming dependents on tax forms lowers the taxable income of taxpayers, the ATO must check the validity of the claims. 

Two criteria exist for the definition of spouse according to the ATO:

  • Proof of legal marriage
  • Proof of living together in a domestic union 

When the couple can prove either of the two, the ATO will grant the dependent status to the other person and the tax benefits it receives.

Lenders look at the definition of spouse differently. During the application process, lenders ask the applicant for the number of dependents that they have. Historically, a spouse has depended on the other for lodging and financial support. Although things look different in 2022, lenders still must examine the financial responsibilities of each homebuyer. 

The financial background check remains thorough to ensure that homebuyers can repay their mortgage choice in full and on time. Thus, dependents lower the borrowing capacity of homebuyers. 

ATO and Spouse Definition Conclusion

For tax purposes, the ATO provides two criteria for the definition of spouse. The criteria determine whether or not a taxpayer can claim another person on their taxes. Adding dependents lowers taxable income. Thus, the ATO sets down rules. For obtaining a home loan, it’s different. Lenders such as Mortgage House take a look at the applicants’ number of dependents including spouses, children, and other family members. To apply for a mortgage, contact our loan specialists.

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