Joint Ownership of Property in Ontario: Rights and Risks

Owning property with someone else is common: spouses, parents and adult children, siblings, friends or business partners. It can make buying easier and simplify what happens after a death. It also ties your property to another person's choices and circumstances.

This article explains the main rights, the ways disputes are resolved and the risks to think about before you add a name to title. The right setup depends on your facts, so treat this as a starting point.

Two common ways to hold title together

Co-owners usually hold title as joint tenants or as tenants in common. The main practical difference is what happens on death. With a joint tenancy, a surviving owner takes over through the right of survivorship, and the survivor updates title with a Survivorship Application. With a tenancy in common, what happens to each owner's share on death depends on the facts and that owner's estate plan, so it is worth confirming with a lawyer.

Converting a tenancy in common to a joint tenancy, or the reverse, between the same parties is not a conveyance, so no land transfer tax applies. Choose carefully, because the choice affects your estate plan.

What each owner can and cannot do

What each co-owner can do on their own, and what needs the others to agree, depends on how title is held and any written agreement between the owners, so it is worth confirming with a lawyer. A co-ownership agreement can set out who pays what, who lives there and how a buyout works.

If the home is a matrimonial home, both spouses have an equal right to possession, whoever is on title. No spouse may sell or mortgage an interest in it unless the other spouse joins in or consents, has released their rights in a separation agreement, or a court order authorizes it. The possession right of a spouse with no ownership interest is personal and ends when they stop being spouses, unless an agreement or order says otherwise.

These matrimonial home rules apply to married spouses. Common-law couples are not legally required to split property acquired while living together, though a partner who contributed may have a claim and may need to go to court.

When owners disagree

Joint tenants, tenants in common and others with an interest in Ontario land may be compelled to make or suffer partition or sale, and any person interested in the land may apply to court for partition or sale. In other words, no co-owner is locked in forever.

There is a waiting period after an inheritance. Where land passed by will or intestacy to joint tenants or tenants in common, no partition proceeding can be taken until one year after the death.

Where co-tenants divide land so that each receives land equal in value to their original interest, no land transfer tax is payable. Court applications can be slow and costly, so a negotiated buyout is often worth exploring first.

Key risks to weigh

• Relationship breakdown: on marriage breakdown, the full value of the family home must be shared even if one spouse owned it before marriage or received it as a gift or inheritance. Equalization claims must be made within six years of separation or two years of divorce, whichever comes first.
• Adding a child to title: if a spouse dies owning a matrimonial home as a joint tenant with someone other than the spouse, such as an adult child, the joint tenancy is deemed severed immediately before death, so survivorship does not operate. The outcome you expect may not happen.
• Probate and estate tax: assets held jointly that automatically become the other owner's on death are excluded from the estate's value for Estate Administration Tax. Whether a particular jointly held property is treated that way is fact-specific, so confirm with a lawyer.
• Tax on adding someone: if the person takes on a mortgage, land transfer tax is payable on the amount owing at registration. A gift of an interest can be deemed a sale at fair market value for income tax.
• Creditors and debts: how a co-owner's debts, lawsuits or bankruptcy affect the shared property depends on the facts. Get advice before relying on joint title for protection.

Steps to take before you share title

• Write down why you want joint ownership and what you expect to happen on death.
• Decide between joint tenancy and tenancy in common.
• Ask about land transfer tax, capital gains and the principal residence exemption.
• Consider a written co-ownership agreement covering costs, use and buyouts.
• Check whether a spouse must consent.
• Review your will and powers of attorney after any change to title.

A lawyer can review the whole picture, prepare the registration and help you document the arrangement so everyone understands it.

Frequently asked questions