Diving Property After Separation in Ontario
When a relationship ends, one of the most stressful parts — besides the emotional rollercoaster and figuring out where the kids will live and who keeps the dog — is figuring out what happens to the stuff. In legal terms, we call that property division.
If you’re separating in Ontario, here’s what you need to know, especially if you're married (because the rules are very different for common-law couples — more on that later).
What Is Net Family Property (NFP), and Why Does It Matter?
When married couples separate in Ontario, the Family Law Act says you don’t necessarily split every single thing 50/50 — instead, you go through a process called Equalization of Net Family Property.
Here’s how it works:
Each spouse calculates:
The total value of everything they own on the date of separation (called the “valuation date”).
This includes homes, cars, RRSPs, pensions, bank accounts, business interests, and even that weird collectible coin set.
Minus any debts and liabilities they had on that same date (think: mortgages, credit cards, loans).
Minus the value of assets they brought into the marriage — that is, what they owned on the date of marriage (with a few important exceptions).
What you’re left with is each spouse’s Net Family Property (NFP) — basically, the increase in net worth during the marriage.
An Example
Let’s say:
On date of separation:
Spouse A has $500,000 in assets and $100,000 in debts = $400,000
Spouse B has $250,000 in assets and $50,000 in debts = $200,000
On date of marriage:
Spouse A brought in $100,000 worth of assets
Spouse B brought in $50,000 worth of assets
So:
Spouse A’s NFP = $400,000 - $100,000 = $300,000
Spouse B’s NFP = $200,000 - $50,000 = $150,000
The difference between them is $150,000. So Spouse A would owe Spouse B an equalization payment of $75,000 — to balance things out.
But Wait: The Matrimonial Home Gets Special Treatment
If you’re married and there are properties that, on the valuation date, were “ordinarily occupied” by the spouses, those properties get treated differently.
Even if:
The home is only in one spouse’s name,
That spouse bought it before the marriage,
And that spouse paid for it entirely on their own…
Its full value is included in their NFP — and no deduction is allowed for bringing it into the marriage.
Why? Because the matrimonial home is special under Ontario family law. The idea is that both spouses contributed to making it a family space, so it’s shared more fully.
This also applies to cottages or second homes if they were “ordinarily occupied” by the spouses — even occasionally.
What About Common-Law Couples?
If you’re not legally married, none of this equalization stuff applies. Instead, you each keep what’s in your name — and if there’s a dispute, the court may adjust that, looking at:
Whether one person was unjustly enriched at the other’s expense,
Whether one person contributed (financially or otherwise) to property owned by the other,
Whether you had a cohabitation agreement that said otherwise.
It’s a very different legal approach — more focused on fairness and contributions than on formulas. That’s a post for another day.
Can We Just Agree on Something Different?
Yes! The law sets out a default process, but you’re allowed to contract out of it with a valid:
Separation agreement
Marriage contract
Cohabitation agreement
These agreements can spell out exactly how you want to divide your property — and as long as they’re fair and done properly, courts will usually respect them.
Why It Matters
If you’re married, equalization of NFP is the default — and understanding it helps you plan and negotiate better.
If you're common-law, you may need to prove a contribution to claim a share.
The matrimonial home rules are a curveball for many people — especially if one spouse bought it before marriage (in that case, we highly recommend entering into a Marriage Contract).
A family lawyer can help make sure you're not giving up more than you should — or missing out on something you’re entitled to.
Need help working through property division after separation?
At Passageway Law, our family lawyers take the guesswork out of Ontario’s family property rules and help you reach a fair, practical outcome. Whether it’s negotiating an agreement or sorting through the math, we’ve got your back. Contact us today to schedule a consultation.
Disclaimer: This post is for informational purposes only and does not constitute legal advice. Property division can get complicated, especially with homes, pensions, or business assets involved. For advice specific to your situation, contact a family lawyer.