Property Division for Common-Law Couples in Ontario

Many people assume that after a few years of living together, everything is split down the middle if the relationship ends. In Ontario, that is not how it works for unmarried couples. The rules that divide property between married spouses do not automatically apply to you.

That does not leave you without options. This article explains what the law says about common-law property, what kinds of claims may be available, and where the rules for support, pensions and tax treat common-law partners differently from the property rules.

Why equalization does not apply to common-law couples

Equalization under Part I of the Family Law Act applies only to a person who is a "spouse" as defined in the Act. That covers people who are married to each other, or who entered a void or voidable marriage in good faith. It does not include unmarried cohabitants.

Ontario.ca states that common-law couples are not legally required to split property acquired while living together, and that property belongs to whoever bought it. How long you lived together does not change this for equalization purposes.

What you may be able to claim instead

A partner who contributed to the other partner's property may have a claim to part of it, and that may require going to court. Property generally belongs to whoever bought it, so a claim depends on what you contributed. How this applies depends on your situation, and time limits for these claims should be checked separately, so it is worth confirming with a lawyer early.

Support is different. The support part of the Family Law Act defines "spouse" to include unmarried partners who have cohabited continuously for at least three years, or who are in a relationship of some permanence and are parents of a child. This gives support rights, not equalization rights.

• Equalization of net family property: not available to unmarried cohabitants.
• Claim for your contribution to property held by your partner: possible, and may require going to court.
• Spousal support: available to partners who meet the Act's definition.

The home and the mortgage

Because the matrimonial home rules do not apply to unmarried cohabitants, the equal right of possession that married spouses have in the family home does not apply to you either. If the home is in your partner's name only, your position depends on other legal arguments and on any written agreement between you.

If you both signed the mortgage, each of you is equally responsible for repaying the unpaid balance, and separation does not change your contract with the lender. A separation agreement or court order between the two of you does not automatically bind the lender, so ask the lender what is needed before you assume someone's name can come off.

Pensions, RRSPs and tax

Under the Pension Benefits Act, the definition of "spouse" includes unmarried partners who have cohabited continuously in a conjugal relationship for at least three years, or in a relationship of some permanence if they are parents of a child. So pension rules may reach you even though equalization does not.

On tax, capital property such as a house, cottage or shares that is transferred to a spouse or common-law partner, or to a former one in settlement of rights arising from the relationship, generally rolls over at the transferor's adjusted cost base. No capital gain is triggered at transfer unless the transferor elects out in their return for that year. That rollover applies only if both people are resident in Canada at the time of the transfer.

CRA Form T2220 is used to transfer all or part of an RRSP or RRIF directly to a current or former spouse's or common-law partner's plan on breakdown of the relationship. If the holder instead withdraws the money and pays it to the spouse, the amount is taxable income to the holder in the year it is received.

What to do next

• Write down when you started living together, who paid for what, and who is on title and on the mortgage.
• Gather bank, investment, pension and RRSP statements for both of you, as far as you can.
• Check whether you have a cohabitation agreement or any other written agreement.
• Do not sign anything about the home or the mortgage until you understand the effect.
• Speak with a family lawyer about contribution claims, time limits, support and tax before deciding.

Frequently asked questions