Is the Increase in Value of a Pre-Marriage Home Divided in BC?

You bought your home before you met your partner, and now the relationship is ending. You may have heard that the house is yours to keep, and also that your spouse may have a claim to part of it. Both ideas can be partly true.

In British Columbia, the starting point is that the home itself stays with you, but the growth in its value during the relationship is treated differently. This article explains how that works, what you need to prove, and what can change the result.

This article covers the law of British Columbia.

The home itself is usually excluded property

Under the Family Law Act, property acquired before the relationship began is excluded property, along with things like inheritances and gifts from a third party. The relationship begins on the earlier of the day you moved in together in a marriage-like relationship or the day you married. A home you owned before that date is generally in the excluded category.

Whether your spouse living in the home affects your claim depends on your situation, so it is worth confirming with a lawyer. The Act says excluded status applies despite a transfer of legal or beneficial ownership between spouses, so adding a spouse to title does not by itself change the exclusion. That said, a gift of an interest in the home or a written agreement may have its own effect, which is worth raising with a lawyer.

The increase in value is family property

The key exception is that the increase in value of excluded property, measured from the later of the start of the relationship or the date the property was acquired, is itself family property and is shared. Family property is generally divided equally unless an agreement or order says otherwise.

The provincial government gives a simple example. A house worth $300,000 when the spouse moved in and $500,000 at separation leaves the owner the original $300,000, and the $200,000 increase is shared. In that example, the sharing is of the growth, not of the starting value.

Proving the starting value and your exclusion

The spouse who claims that property is excluded is responsible for demonstrating that it is. In practice that means being able to show when you bought the home and what it was worth when the relationship began. Without that evidence, it can be hard to separate the original value from the increase.

Value is generally measured at fair market value as of the date of the dividing agreement or the court hearing, not the separation date, unless an agreement or order says otherwise. So a current valuation matters, as does a valuation reflecting the start of the relationship.

• The purchase agreement and closing documents showing the date you bought
• Evidence of the date you moved in together or married
• An appraisal or assessment showing value near the start of the relationship
• Mortgage statements and records of any renovations or major payments
• Any written agreement about the home signed by both of you

When the result can differ

Spouses may agree in writing to change what is included or excluded, or to value items differently, and a court cannot override a written, witnessed agreement unless it is set aside. If you signed a cohabitation or marriage agreement, read what it says about the home before assuming the default rules apply.

The court may also order an unequal division of family property if an equal division would be significantly unfair, although the government says courts will not order unequal division in most cases. Dividing excluded property itself is narrower still: it is possible only if it cannot practically be divided outside B.C., or if not dividing it would be significantly unfair. Government examples include long interdependent relationships.

Whether a couple counts as spouses also matters. Married people are spouses, and so are people who have lived in a marriage-like relationship for a continuous period of at least 2 years. Having a child together does not make a couple spouses for property division without the 2-year period.

What to do next

Time limits apply. A property claim must generally be started no later than 2 years after a divorce judgment for married spouses, or after separation for spouses in a marriage-like relationship. The limit is suspended while the parties are in family dispute resolution with a professional or a prescribed process.

• Collect the documents listed above before you value anything.
• Get a valuation as of the start of the relationship and a current one.
• Find any written agreement and have it reviewed.
• Speak with a family lawyer about how the increase would be calculated and whether tax or mortgage issues affect your situation.

Frequently asked questions