Dividing Property in Ontario: Matrimonial vs. Separate Assets

Divorce is tough, but dividing property can be even tougher. Who gets the house? What about retirement savings? And that vintage car you've been restoring for years—does your spouse get a claim on that too?

Ontario's Family Law Act sets clear rules on property division, but not all assets are treated the same. Some are matrimonial assets, meaning they’re split between spouses. Others are separate assets and stay with their original owner.

The problem? Many people don’t know which assets fall into which category. Some assume everything is shared, while others try to hide assets—moves that often backfire.

This guide breaks down what counts as matrimonial vs. separate assets, how equalization works, and common mistakes to avoid.

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What Are Matrimonial Assets?

Matrimonial assets include property and possessions acquired during the marriage, regardless of whose name is on the title.

Examples of Matrimonial Assets:

Family home (even if only one spouse is listed as the owner).

Bank accounts, investments, and retirement savings.

Vehicles, furniture, and household items.

Businesses or professional practices started during the marriage.

📌 Key Point: If an asset was acquired during the marriage, it’s likely a matrimonial asset—even if only one spouse paid for it.

What Are Separate Assets?

Separate assets (also called excluded property) are generally not subject to division in a divorce.

Examples of Separate Assets:

Property owned before marriage.

Inheritances and gifts received during marriage (if kept separate from marital assets).

Personal injury settlements.

📌 Example: If you inherit a cottage during the marriage but keep it in your name, it may stay separate. But if you and your spouse use joint funds for renovations, the increase in value could be subject to division.

How Property Division Works in Ontario

Ontario follows the equalization of net family property (NFP) process, which ensures fair asset distribution.

Step 1: Calculate Your Net Family Property (NFP)

Add up all your assets at the date of separation.

Subtract your debts at the date of separation.

Deduct the value of assets owned at the time of marriage.

Step 2: Equalization Payment

The spouse with the higher NFP must pay half the difference to the other spouse.

Example: If one spouse has an NFP of $500,000 and the other has $300,000, the difference is $200,000. The spouse with the higher NFP pays $100,000 to equalize the division.

📌 Fact: The Ontario Family Law Act governs property division (Government of Ontario).

Common Pitfalls to Avoid

1. Hiding Assets

Some people try to hide money or property, but courts take financial disclosure seriously. If caught, you could face penalties or even legal action.

✔ Solution: Be honest. Full disclosure is legally required and helps ensure a fair settlement.

2. Overlooking Debts

Marital debt is also divided. Mortgages, credit card debt, and loans taken during the marriage must be accounted for.

✔ Solution: Make a detailed list of all debts, including amounts and monthly payments.

3. Ignoring Tax Implications

Some assets (like RRSPs or investment properties) come with tax consequences that can affect their true value.

✔ Solution: Consult a financial advisor to understand the tax impact before dividing assets.

📌 Fact: In Canada, capital gains tax may apply to investment property transfers (Canada Revenue Agency).

What Happens to the Family Home?

The family home is almost always considered a matrimonial asset, no matter who owns it.

Your Options:

Sell and split the proceeds.

One spouse buys out the other’s share.

Continue co-owning (usually until children reach adulthood).

✔ Pro Tip: If keeping the home, ensure you can afford the mortgage, taxes, and maintenance costs on your own.

📌 Fact: Even if one spouse owned the home before marriage, it’s still subject to division if used as the family residence (Ontario Family Law Act).

How Braystone Mediation Can Help

Property division is one of the most complex parts of divorce, but you don’t have to handle it alone. At Braystone Mediation, we help couples navigate the process fairly and efficiently.

Our Services Include:

Explaining Ontario’s property division laws in clear, simple terms.

Guiding you through the equalization process.

Providing support to reduce conflict and reach fair agreements.

And with our flat-fee pricing, you’ll know exactly what to expect—no surprises, no hidden costs.

Secure Your Financial Future

Dividing property in a divorce can be challenging, but knowing the rules helps protect your assets and financial stability.

✔ Key Takeaway: Transparency, preparation, and expert guidance can help you achieve a fair outcome.

If you need support, Braystone Mediation is here to help you every step of the way.

📌 Fact: Mediation often leads to faster and more cost-effective divorce settlements compared to court (Canadian Forum on Civil Justice).

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