How is Family Property Split In a Divorce?


Divorcing couples in Ontario must split property acquired during marriage equality when they separate. Examples include:

  • Home
  • Car
  • Business
  • Furniture
  • Pension
  • Money

The increase in value of property owned before the marriage is usually divided equally. Your family house is included in this division.

It would help if you shared the entire value of the family home, regardless of whether or not:

  • Your home was owned by one of you before you got married
  • It was a gift from someone
  • It was inherited

Equalization payments or net family property equalization are required to effect this sharing between spouses. In common-law relationships, property acquired when the couple lived together is not legally required to be divided. 

Time limits

Generally, you have two years from the day of your divorce to go to court for an equalization payment decision.

Here are some other options for dividing your property

Separation agreements allow you and your spouse to divide your property however you want.

Both of your lawyers should review separation agreements before you sign them. You cannot change your separation agreement later.


One spouse is allowed to retain some property absent a divorce. This exception is known as excluded property.

The following types of property are excluded:

  • You received or inherited any property (other than your family home) from someone other than your spouse during your marriage.
  • An insurance company paid you money because someone died.
  • A claim for money that you were awarded or have the right to receive due to personal injury, such as a car accident
  • An agreement between you and your spouse that excludes specific property

Previously, it was mentioned that family homes that were gifted or received as inheritances do not count as excluded property. The property must be divided equally unless you and your spouse agree otherwise.

In the case of a large piece of property used for other purposes, only the house and its immediate surroundings are considered the family home. It is generally not considered a family home if your family home is on a dairy farm.

Only in exceptional circumstances can a court order a different division of property if a 50-50 (equal) split would be highly unfair to one of you. Contact an attorney if you need more information.

Cohabitation Agreements or Marriage Contracts

Marriage contracts are legal documents signed before the couple gets married that protect their rights if they separate later, including their property rights. Common-law couples can sign a cohabitation agreement.

Depending on the terms of the contract, the relationship might end as follows:

  • Whether you will have to pay child or spousal support
  • What you will do with your property
  • Who will move out of the house

Your contested or uncontested divorce decree will not specify who will make decisions for your children or how much time you will spend with them.

You need to sign your marriage contract or cohabitation agreement before a witness for it to be legally binding. Following the agreement is your responsibility once it’s been signed. Contract/agreement changes can be negotiated in writing and signed before a witness.

You will have to go to court if you and your spouse cannot agree on what to do about changing the terms of the contract/agreement if you have separated and do not agree with its terms.

You have to sign a marriage contract or cohabitation agreement, after you and your partner should meet with different lawyers and exchange financial information.

What You Might Owe or Be Owed

It can be complicated to add up the value of your properties and divide them between you and your spouse.

In this section, you’ll learn how to calculate what you or your spouse owe each other. Consult a family lawyer if you are unsure how the rules apply to your case.

A full financial report is required if you go to court to explain your property, debts, and income. You must complete this process ethically and fairly. You must swear that you have accurate information.

The following steps can help you determine what your spouse may owe you.

Step 1 

Divide the total value of your property by the amount of your debts and exclude the value of your excluded property as of the day of your separation

Anywhere in the world, you can locate a property that includes:

  • Homes
  • Businesses
  • Cars
  • Furniture
  • Jewelry
  • Investments in the stock market, retirement savings, tax-free savings plans, and registered education savings accounts
  • Any other property you own or are entitled to

Each of you should put half of the property’s value on your list if you own property jointly in both names.

Excluded properties include:

  • A property that you inherited during your marriage (other than your family home) or were given by someone other than your spouse
  • A death benefit you received from an insurance company
  • In the event of a personal injury, such as a car accident, the money that you received or have the right to receive
  • An agreement between you and your spouse that excludes property

A few examples of debts are:

  • Credit card balances
  • Your mortgage balance (the amount left to pay)
  • Automobile loan

Step 2

In the month of your marriage, minus the value of your debts, subtract the value of the property you owned at the time of your marriage.

To begin figuring out the value of your property when you got married, add up everything you owned on that day. Your family home should not be included, even if you owned it at the time of your marriage. Even if you were married before the house was owned by one of you, or it was given in the form of a gift, or you inherited it, you must share the home after your divorce.

After that, subtract all your debts, except for your family home (for example, a mortgage).

Step 3

Divide the result from Step 1 by Step 2 to determine the difference. Congratulations, you know the value of your share of the net family property. Shares with a negative amount are considered zero.

Step 4 

Find out whether your spouse owes you any money. Comparing your share of the family property with your spouse’s share. You can calculate the difference by subtracting the smaller amount from the more significant amount and dividing it by two.

A spouse whose share is larger must pay the spouse whose share is smaller than this amount. This is referred to as equalization.

Final Words

Separation or divorce can be emotionally and financially draining. An attorney can explain your rights concerning property division. If you need advice about the case or help with the steps, the lawyer can help. You can also hire a lawyer who offers you “limited scope services” if you cannot hire a lawyer for your entire case. If you still have any questions feel free to contact us, and we would be happy to help you.

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Written by: the Divorce Fast Team

Our team of Ontario lawyers has over 15 years of experience handling divorce and other family law matters.

All of our lawyers are in good standing with the Law Society of Ontario, and have the knowledge and experience to help and guide you through your family law issues. Whether your matter pertains to divorce, separation, custody/access, or support claims, we are the firm for you.

Contact Divorce Fast for a Free Consultation.

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