Divorce And Real Estate
The Ashley Madison hack has been making headlines for a month now since a group of digital activists released the details of every single Ashley Madison account holder including some potentially embarrassing nuggets of private info. Obviously many of the alleged cheaters have been cowering in corners hoping they aren’t found out but some have been caught red handed and shown the door by their former spouses. Unfortunately a lot of our business comes from splitting couples and we try to make a painful situation a little more tolerable by handling the properties and saving these folks as much money as we can.
What happens when you own a property together and one EX is going to stay? Many people are under the impression that you’ll have to pay land transfer tax when you buy out your partner and change ownership. It’s not an unreasonable assumption. As you can imagine the municipality will dig their hands in your pocket at every opportunity (we can thank the Honourable David Miller for our current double land transfer tax!)
The one and only time the Municipality won’t kick you while you’re down is when you’re transferring title on a property between separating spouses. Want to avoid paying Land Transfer Tax when divorcing or separating? Here are the THREE (3) exemptions that we hope will help you save some money during your difficult time.
- The only consideration given is the assumption of any encumbrance registered on the land, such as a mortgage.
- Meaning, you’re dropping one of the names off of the mortgage and no money is being exchanged.
- The transfer is in compliance with a written agreement of separation, pursuant to which the parties agree to live separate and apart.
- The best way to amicably separate and divide your assets is to have a lawyer prepare a written agreement setting out the terms of your Separation. Generally, in these agreements there is a “buyout” or some sort of arrangement which details the terms of the division of a particular piece of property. Once your lawyer transfers the property pursuant to the terms of the agreement then the person remaining in the home isn’t liable for additional Land Transfer Tax.
- The transfer is pursuant to a court order or judgement
- This happens in the unfortunate circumstances where people have to litigate in order to divide their property. This works the same way as the Separation Agreement. Once you obtain your Court Order, it will set out the terms of transfer or buyout which your real estate lawyer will then use to transfer the property. The Party who remains in the home isn’t liable for any Land Transfer Tax.
What is a Spouse exactly? It’s simply a couple that is married or partners who have cohabited for a minimum of 3 consecutive years.
There you have it, that’s how you can make an already painful process a little less painful in the pocketbook. We’re not Lawyers nor do we pretend to be! This article was written with a ton of help from our friends at WeAreLaw.ca more specifically, Dheeraj Sindhwani a Real Estate and Family Law specialist and super awesome human being. Please reach out to Dheeraj with any further questions or type your question in our live chat below and one of us will be with you right away.