New deals every week. Shop Deals →
Seller guide · Ontario
In Ontario, the family home gets special treatment when a marriage ends. Its full value is shared, no matter whose name is on title or who owned it first. That leaves most couples with three options: one buys the other out, you sell, or one stays for a while and you sell later.
By Alex Reid · Updated
The short answer
Ontario divides married couples’ property through an equalization payment. Each spouse adds up what they own at separation, subtracts debts and what they brought into the marriage, and the one with more pays the other half the difference.
The matrimonial home is the big exception. You can’t deduct its value as of the wedding day, even if one spouse owned it outright before. Its full value is shared, unless you agree otherwise.
Under the Family Law Act, both spouses have an equal right to possession of the matrimonial home, and neither can sell or mortgage it without the other’s consent or a court order.
The matrimonial home in Ontario
Value shared
Full value
Even if owned before marriage
Deadline to claim equalization
6 years
From separation, or 2 years from divorce, whichever is first
Signatures to sell
Both
Or a court order
Most separating couples end up in one of these. Your lawyers will build the settlement around whichever you choose.
First agree on the value. Most couples get an independent appraisal, or one each and split the difference.
The equity is the value minus the mortgage and the costs of selling you are avoiding. The staying spouse pays out their share, usually by refinancing the mortgage in their own name, and title is transferred.
The hard part is usually the refinance. The staying spouse has to qualify on their own income, often with support payments counted in. Talk to a mortgage broker before you agree to a buyout figure.
Worked example
The house appraises at $800,000 and the mortgage is $300,000. Equity is $500,000. If it is split equally, the staying spouse needs to refinance to about $550,000 to pay the other $250,000. Lawyers then fold that into the overall equalization.
Both spouses on title sign. Even if only one name is on title, the other spouse’s consent is normally needed because it is the matrimonial home.
The proceeds go to a lawyer’s trust account and are paid out under your separation agreement or a court order.
Selling while separating has a practical cost: both of you have to agree on a listing price, repairs, staging and every showing. Some couples prefer a direct sale for one firm number and a fixed date. See selling a house during a separation.
Common-law couples aren’t covered by the equalization rules. Property generally belongs to the person who owns it, and the matrimonial-home rules don’t apply the same way.
If you contributed to a home your partner owns, you may have a claim to part of its value, but you may have to go to court for it. A cohabitation agreement avoids that. Get a family lawyer’s advice early.
Sources
This guide is general information, not legal, tax or financial advice. Private Deals buys homes directly and is not a real estate brokerage. Talk to a lawyer before you sign anything.
Get a no-obligation written offer in 24 to 48 hours and compare it with what listing would net you.
