On the limited facts, I think her proposal is reasonable. In a relationship of this length, initial contributions plus an equal share of gain or loss & dividing any other assets bought jointly is the correct appraoch.

I don't understand the discrepancy. She put in $38K, wants half of the improved value of the property and half the assets which is worth $100K but you estimate it at $65 if you go 50/50?

Sounds like you want the same thing except she wants her initial contribution back?

So - it would be:

((total pool less debt) - your starting contribution - her starting contribution)/2

She would get this figure + her starting contribution (this is normal for a relationship under 5 years).

So - I'm taking it that the assets (including the capital increase in value of the property) work out to $120-130K?

Yes - her proposal sounds right anyway. She should get her initial $$$ back and share in the capital increase in value + other assets.