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What Happens to Property Owned Before Marriage in Canada?

All of us are aware of how quickly houses in Toronto and the surrounding area are increasing in value. Buying a house is no easy task; it takes a lot of effort and, of course, money.

Imagine this: you put a lot of effort into your education, work a full-time job for years, and eventually earn enough money to buy a house. You then pay the mortgage on your own for a while, meet your partner, get married to them, get divorced from them, and eventually lose a significant amount of the equity in your house to them. So how can one retain a property or to put it this what happens to property owned before marriage in Canada after the couple decides to separate from the bond of marriage. 

Premarital Assets and Its Distribution after the Split

Premarital assets are often not regarded as marital assets and are not subject to equalization. The matrimonial residence is an exception to this general rule, though. One spouse’s premarital residence that is converted to the married residence after marriage is considered marital property and this is how typically and legally the assets are split in divorce in Canada. 

For instance, a cottage that is often inhabited by both partners can serve as a married couple’s residence. However, a hunting cabin used exclusively by one spouse would not qualify as a marital residence.

The family home is typically a couple’s most valuable possession, so for many, this is a sad fact and something our customers should be aware of. There are unique laws governing how the marital residence is handled after a divorce in Ontario and what will happen to the property owned before marriage.

Matrimonial Home Under The Law

A “matrimonial home” is defined as follows under the Family Law Act:

“Every property in which an individual possesses an interest, or, in the event of a divorce, was regularly occupied by the individual and their spouse as their family home during the separation, is their matrimonial home.”

NOTE: A couple may own more than one marital residence, which is an important point to remember. 

Special Regards for the Marital Residence Under the Family Law Act

According to Section 19 of the Family Law Act, each spouse has an equal right to possess the marital residence, barring a court order or agreement granting one spouse exclusive possession. This implies that neither partner may bar the other from entering the marital residence without a written agreement or court order. A kind of settlement will happen upon the property owned before marriage in deciding whether to grant exclusive possession, the Court will take into account the factors outlined in section 24(3) of the Family Law Act.

The fact that neither spouse may sell or otherwise encumber any interest in a matrimonial house without a court order or agreement is another distinctive feature of the matrimonial home. But normally the split of the assets in divorce in Canada will take place in the light of the ibid laws. 

Using a Marriage Contract to Protect Your Home

You can sign into a marriage contract to safeguard and maintain your rights in the event that your marriage dissolves, regardless of whether you are already married or intend to be married. You should sign a marriage contract created by a qualified Ontario family lawyer to guarantee that the safeguard surely will happen to the property owned before marriage. 

What Happens to Property Owned Before Marriage in Canada?

The Ontario Family Law Act governs married couples’ rights to divide property. Subject to a few restrictions, each spouse is entitled to an equal share of the value of all assets accumulated during the marriage in the event of a divorce or the death of one spouse. A spouse is entitled to a credit for the date of marriage assets included into the computation.

How are Assets Split in a Divorce Canada?

In Ontario, property is not shared upon separation; instead, the value of the property—more precisely, the appreciation of the property that each spouse owns—is divided. 

Am I entitled to half my husband’s business in Canada?

This means that if you own the marital residence outright (perhaps because you owed it before getting married), it remains in your name (barring any claims your spouse might make if they contributed significantly to the property). However, your spouse is entitled to a portion of the value of the marital residence as part of an equalization payment that divides the property.


There are other ways to determine this divide, depending on the particulars. If the business is owned equally by both partners, both spouses’ financial accounts will reflect the business’s value. The business will probably be divided evenly in a divorce and you can be entitled to half of your husband’s business in Canada. On the other hand, you are eligible to deduct the worth of your business from your marriage date.


What Then Happens to Property in Ontario that is Owned Prior to Marriage?

  1. The Family Property Act (FPA) governs the distribution of assets in Ontario, Canada with regard to property possessed before marriage. There is an assumption of equitable distribution of marital assets and debts under the FPA.
  1. Certain property, however, is not divided in the event of a divorce or separation. This includes property acquired as a gift from a third party, assets inherited from family members, assets possessed before the relationship, and insurance proceeds.
  1. Certain property, however, is not divided in the event of a divorce or separation. This includes property acquired as a gift from a third party, assets inherited from family members, assets possessed before the relationship, and insurance proceeds.
  1. It is significant to remember that the market value of the exempt property is exempt at the time of marriage or acquisition, but any increases in value may be divided. Although it is distributed fairly, the growth in value is not always divided equally.
  1. To establish the existence of exempt property, evidence is needed.
  1. You and your spouse may divide your property in any way you choose under a separation agreement, provided that you both agree. Obtain legal advice prior to signing, as it becomes difficult to amend or revise a separation agreement once it has been executed. 

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Adnan Khan

My name is Adnan Khan and I am a realtor specializing in Pre-construction condos and homes sales. I also do assignments of condos. You can contact me at 416-897-4714 Designation: P.Eng Education: McMaster University, Engineering Technology Specialty: Residential Real Estate Experience: 15+ Area Covered: Downtown Toronto and Neighboring Area Languages Spoken: English, Urdu

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