In an Ontario Divorce, Who Gets the House?

For many separating couples, the family home is both their largest asset, and also the property to which they are most emotionally attached.  

Not surprisingly, at our firm one of the first questions we get from our newly-separated clients is: “Who gets to keep the house?” 

In Ontario, there is no automatic rule that the husband gets the house, the wife gets the house, the parent with the children gets the house, or even that the house must be sold. Instead, several different legal issues have to be considered, and a determination is then made on a case-by-case basis. 

First of All, What Is a “Matrimonial Home”? 

Ontario’s Family Law Act gives special treatment to a “matrimonial home.” Under section 18 of the Act, a property will generally qualify if the spouses ordinarily occupied it as their family residence at the time of separation. 

(And note that there can be more than one matrimonial home. A cottage or other residence regularly occupied by the family, for example, may also qualify). 

The rules concerning a matrimonial home apply to legally married spouses. Property rights for unmarried common-law partners are different. 

Misconception #1: “The House Is in My Name, So It’s Mine” 

Being the registered owner does not necessarily answer what happens to the matrimonial home after separation. 

Under section 19 of the Family Law Act, both married spouses have an equal right to possession of the matrimonial home, even if only one spouse owns it. This means that a spouse generally cannot simply tell the other spouse to leave because “the house is mine.” 

Instead, in appropriate circumstances a court can grant one spouse exclusive possession of the matrimonial home. That determines who may live there; it does not, by itself, change title/ownership of the property. 

Misconception #2: “I Owned It Before We Married, So I Get It Back” 

This is one of the most important exceptions to Ontario’s usual property-division rules.  Once again, the matrimonial home is treated differently. 

Generally, when spouses separate, each calculates his or her “Net Family Property.” The property each of you owned on the date of separation is included, while the value of property owned on the date of marriage can generally be deducted. The spouse with the higher Net Family Property ordinarily pays the other one-half of the difference. This is known as an “Equalization Payment.” 

The matrimonial home is treated differently, however. 

If one spouse owned the home before marriage and the real property was still considered the “matrimonial home” at separation, that spouse generally cannot deduct its date-of-marriage value when calculating Net Family Property.  

This means that the entire value of the home – and not merely the increase in its value during the marriage – may enter into the equalization calculation. 

This can produce a significant and sometimes unexpected result. A person who brings a $500,000 house into a marriage does not necessarily get credit for that original $500,000 if the same property is the matrimonial home when the spouses separate. 

Misconception #3: “The Matrimonial Home Is Automatically Divided 50/50” 

Not quite. 

Ontario’s Family Law Act generally equalizes the spouses’ net family property; it does not simply divide every individual asset between them. The matrimonial home forms part of that larger calculation. 

For example, one spouse might ultimately keep the house while the other keeps other assets or receives an equalization payment. If the spouses jointly own the home, one may also agree to purchase the other’s interest. 

So, while the value of the matrimonial home can have a major impact on property division, this does not necessarily mean that each spouse receives a 50% ownership interest in the house itself. 

Misconception #4: “The Parent with the Children Automatically Gets the House” 

In Ontario, there is no automatic rule giving ownership of the matrimonial home to the parent with whom the children primarily reside. 

However, the children’s circumstances can be important when a court decides who should remain in the home temporarily. Under section 24 of the Family Law Act, a court deciding whether to grant exclusive possession considers several factors, including: 

• The best interests of the children,  

• The spouses’ financial positions,  

• Other suitable and affordable accommodation, and  

• Any violence committed by a spouse against the other spouse or the children. 

Exclusive possession can therefore allow one spouse and the children to remain in the home without deciding who ultimately owns it. 

Misconception #5: “If We Cannot Agree, the Court Will Give the House to One of Us” 

Sometimes neither spouse will ultimately “get” the house. 

If the parties cannot agree on what should happen, sale of a jointly owned home may become necessary. In other cases, one spouse may be able to buy out the other’s interest, provided the parties can agree on value and the spouse keeping the property can arrange the necessary financing. 

The appropriate solution will depend on ownership, the home’s value and mortgage, the spouses’ other property and debts, the equalization calculation, and the practical ability of either spouse to maintain the home. 

The House Is Only Part of the Property Settlement 

The matrimonial home receives special treatment under Ontario family law, but asking “Who gets the house?” can oversimplify the issue. 

A separating couple may actually have to answer several different questions:  

• Who owns the home?  

• Who is entitled to live there while matters are being resolved?  

• How does its value affect equalization?  

• Can either spouse afford to buy out the other?  

• And, if not, should it be sold? 

Understanding those distinctions can help separating spouses make informed decisions about an asset that is often both financially significant and personally important.  If you’re unclear on your rights, give our offices a call.  We can help.