Property Division in Canada

This is general information and should not be interpreted as legal advice. Contact a family law lawyer to understand your rights and obligations.

When a relationship ends, the emotional challenges are often accompanied by complex financial and legal issues. One of the biggest questions separating couples face is: How will our property be divided? In Canada, the rules for property division depend on whether the couple was legally married or in a common-law relationship, as well as which province or territory they live in.

Property Division for Married Couples

Across Canada, married couples who divorce are subject to the federal Divorce Act as well as provincial and territorial property laws. In most provinces, including Ontario, the principle of equalization of net family property applies.

This doesn’t mean that every single asset is literally split in half. Instead, each spouse calculates the value of their net worth at the end of the marriage (assets minus debts), subtracts what they brought into the marriage (with some exceptions), and the difference is equalized between them. The idea is that both spouses share equally in the financial growth during the marriage.

For example, if one spouse’s net family property is $200,000 and the other’s is $100,000, the spouse with the higher amount would pay $50,000 to the other to equalize.

Certain assets may be excluded from division, such as inheritances or gifts received during the marriage as long as they were kept separate and not put into the matrimonial home. However, the matrimonial home has special rules, regardless of who paid for it or owned it before marriage, both spouses have an equal right to possession and it must be factored into property division.

Property Division for Common-Law Couples

For couples in common-law relationships, property division works differently. Common-law partners are not automatically entitled to equal sharing of property when they separate. Instead, each partner generally keeps what they own, unless they can prove a contribution to the other’s property under legal concepts like unjust enrichment, resulting trust, or constructive trust.

Debts and Liabilities

Just like assets, debts are also part of property division. Mortgages, loans, and credit card balances are considered when calculating net family property. Both parties may be responsible for joint debts, even if only one spouse benefited directly.

Agreements and Flexibility

Couples don’t always have to rely on the court to divide their property. They can enter into a separation agreement or a marriage contract (prenuptial agreement) that outlines how assets and debts will be divided if the relationship ends. Courts will generally uphold these agreements as long as they were made fairly and both parties had independent legal advice.

Seeking Legal Support

Property division can be one of the most complex and contentious aspects of a separation. Whether you're married or in a common-law relationship, getting legal advice tailored to your specific circumstances is essential. A family law lawyer can help you understand your rights, protect your interests, and guide you through your next steps. If you have questions about property division or need support with your separation, contact Majoka Law today to schedule a consultation.