Can equalization be paid by transferring property instead of cash in Ontario?

Yes. Equalization is a financial debt between spouses, but it can be satisfied in any way both parties agree — or that a court orders. Cash is the simplest method, but spouses commonly satisfy an equalization obligation by transferring the matrimonial home, a vehicle, an investment account, RRSP funds, or other assets instead.

Spouses can be creative: for example, the spouse who owns the home could keep it and offset the other spouse's equalization entitlement by giving up any claim to a pension or investment account. These arrangements are often called "off-set" settlements and allow each party to keep the assets most important to them.

When property is transferred in satisfaction of equalization, the tax implications must be carefully considered. Spousal transfers of property are generally exempt from capital gains tax under the Income Tax Act if structured correctly, but this requires proper legal and tax advice. An RRSP transfer between spouses can be done on a rollover basis if the correct paperwork is filed.