The matrimonial home is a special kind of asset*

Ottawa lawyer Tim Sullivan on marital homes

Remember Eddie Murphy’s comedy video Raw diatribe on splitting assets in a divorce? To paraphrase: “she gets half!!”. For all his talent, the voice of ShrekŦ is not an Ontario lawyer. When a married couple separates, the Ontario Family Law Act (FLA) provides that they share the increase of the value of assets acquired and split the debts incurred during marriage. They don’t get the asset; they share the net increase of value. This process is called the Equalization of Net Family Properties, or “NFP” for short.

The FLA provides for the separating couple to share the net growth of their assets from the date of marriage (DOM) to the date of separation (DOS)*. Everything from art and bank accounts to pensions and zinc mining shares§ … pretty much everything is valued between the DOM and the DOS. This is important: the two periods of time are the Date of Marriage and the Date of Separation. To the FLA, there is no special treatment for any asset% – except the matrimonial home (lawyers call this the “mat home”).

The mat home is the home the married couple lived in on the date of separation§§. It is treated differently than other assets in an NFP in one respect: if one person owned the mat home on the DOM, the “DOM” value is the original purchase price, not the value on the actual date of marriage. The full increased equity from the date of purchase to the DOM is included on the owner’s side of the ledger which is not the case for any other asset. All other assets get a “DOM deduction” (owned before the DOM but valued as of the DOM), but not the mat home.

Other provisions apply to the mat home as well. A married spouse, whether an owner or not or signed to the lease or not has the right to occupy it after separation†* This right of occupation  applies whether the mat home is an owned or rented house, a leased apartment or a condo or a cardboard box under a bridge. Also, the non-owning spouse must agree to any mortgage or sale after the DOM.

There are ways around sharing the pre-marriage value*. The non-owner spouse can purchase an interest at fair value before marriage or the couple can sign a marriage contract* to exempt the pre-marriage value increase or unequal down payment in the event of an equalization. Parents lending or gifting (even through a Will) a child money for a down payment (or if the money could end up in the mat home through mortgage payments or improvements) should consider how a mat home’s value is treated on separation under the FLA*.

After reading this blog post along with the footnotes, are you ready to calculate your NFP? *!


*    There is a lot to consider. You should get legal advice. Contact SullivanLaw
¶    Many expletives were deleted.
Ŧ   Shrek is my favourite movie.
§   I financed school by working during summers at a zinc mine.
%  Some assets are excluded like inheritances* and personal injury awards.
§§ There can be more than one mat home. There can only be one “principal residence”.
†   A separation agreement or court order is required to change this.