Separation and the Family Home: Selling or Keeping It in BC

A separation brings hard decisions, and the family home is often the biggest one. Whether you sell or one of you keeps it, BC's Family Law Act shapes the options. Here is a plain-language overview of the rules, the costs and the timing, to help you plan with your lawyer.

The short version

Is the home family property?

The Family Law Act's property rules apply to spouses: people who are married, or who have lived in a marriage-like relationship for at least two years in a row. Family property is everything either of you owns on the date you separate, apart from excluded property.

• Shared equally. On separation, each spouse is entitled to half of the family property, no matter whose name it is in. A court can divide it unequally only if an equal split would be significantly unfair.
• Excluded property includes what a spouse owned before the relationship began, inheritances and gifts from someone else. Any increase in its value during the relationship is family property. For example, if a house was worth $300,000 when the relationship began and $500,000 when it is divided, the owner keeps the first $300,000, and the $200,000 increase is shared.
• Joint names. Since May 11, 2023, putting excluded property into joint names doesn't by itself make it shared.
• Valuation. The home is valued when you sign an agreement dividing it, or at the court hearing, not on the day you separated, so a rising or falling market affects both of you.

Deadlines

Married spouses have two years from the divorce order to start a claim to divide property. Unmarried spouses have two years from the date they separated. The clock pauses while you are working with a family dispute resolution professional, such as a mediator. Family Law in BC suggests dealing with property before you agree to a divorce.

Protecting your interest in the home

• If only your spouse is on title. You can file an entry under the Land (Spouse Protection) Act against the family home, if you live there or lived there within the past year. Once it is filed, a sale or other transfer is void without your written consent. Your spouse isn't notified, and it only covers the family home. A lawyer can help with the forms.
• In a court case. In a Supreme Court family claim, you can register a certificate of pending litigation on the title, which usually prevents a sale or new mortgage until the case is resolved. It is usually filed through a lawyer or notary.
• Restraining a sale. On application, the Supreme Court must make an order stopping a spouse from disposing of property that is in dispute.

Who stays in the home

You can agree between you who stays until the home is sold or one of you buys out the other. If you can't agree, the Supreme Court can give one spouse exclusive occupation of the family home for a set time, which doesn't change who owns it or how it is divided. Agree in writing who pays the mortgage, insurance, utilities and repairs in the meantime. Family Law in BC notes that a spouse who pays the mortgage or repairs alone is usually compensated for those payments when the home is sold.

Selling the home

Family Law in BC describes three main options: sell, have one spouse buy out the other, or let the parent caring for the children stay until they reach an agreed age. If you sell:

• You both have a say. If you are both on title, the transfer to a buyer needs both of your signatures. Even when only one spouse is on title, BC's real estate regulator has told agents that both spouses must be involved in decisions about selling family property.
• Agree on the details in writing: the price, the agent, the timing and how showings will work.
• Split what's left. Commission and legal fees usually come off the proceeds before they are divided, equally or by the percentages you agree.
• If you can't agree, the Supreme Court can order the home sold and the proceeds divided.

An evidence-based price helps take the guesswork out of a hard conversation. I explain how a list price is set in Inside a Comparative Market Analysis.

Buying out your spouse

• Property transfer tax. A transfer to a spouse or former spouse under a written separation agreement or a court order under the Family Law Act is exempt, as long as the spouse receiving it is a Canadian citizen or permanent resident.
• Financing. The spouse keeping the home will need to qualify for the mortgage, usually on their own income. Sagen and Canada Guaranty allow an insured mortgage of up to 95% of the value for a buyout when both of you are on title, with a separation agreement or court order as proof. Insured mortgages are only available on homes under $1.5 million.
• The old mortgage. If you both signed it, the lender can collect from either of you until it is paid off or the lender releases one of you. Breaking a closed mortgage early can mean a prepayment penalty.

Taxes to know about

• Principal residence. A family can designate only one principal residence for each year. If you are still married, you can each designate your own home only for years you were separated for the whole year under a court order or written agreement. The rules can differ for common-law partners and once you are divorced, so check with an accountant.
• Flipping rules. If you sell a home you owned for a short time, both BC's home flipping tax and the federal flipping rule have an exemption for a relationship breakdown when you have lived apart for at least 90 days before the sale. You still have to file a BC home flipping tax return.
• Speculation and vacancy tax. Spouses who have lived apart for at least 90 consecutive days in a year because the relationship broke down can claim a separation exemption.

Getting help

If you need a court order to divide property, only the Supreme Court can make one. A family lawyer can explain your options and draft a separation agreement. Mediators help couples reach their own agreement. The Province's Family Justice Centres, including centres in Port Coquitlam and New Westminster, offer free help with parenting arrangements and support, and Family Law in BC, run by the Justice Education Society, has clear guides to dividing property. If you don't feel safe, VictimLinkBC offers support 24 hours a day by phone or text at 1-800-563-0808.

Questions clients often ask me

Do I get half the house if my name isn't on title?

Usually, yes, if you are spouses under the Family Law Act. Family property is shared equally no matter whose name is on title, though some value can be excluded, such as what a spouse owned before the relationship or received as an inheritance or gift.

Can my spouse sell the house without my consent?

If you are both on title, a sale needs both of your signatures. If only your spouse is on title, they may be able to sell unless you file an entry under the Land (Spouse Protection) Act, which makes a sale void without your written consent.

How long do I have to make a claim to the family home?

Two years from the divorce order if you were married, or two years from separation if you weren't.

Is there property transfer tax when one spouse buys out the other?

Not if the transfer is under a written separation agreement or a court order under the Family Law Act, and the receiving spouse is a citizen or permanent resident.

Do we have to sell the house when we separate?

No. You can sell, one of you can buy out the other, or you can agree that one parent stays with the children for a set time.

If you are selling, read the BC selling process from listing to completion, and if you are buying your next home, see How Much House Can You Afford?

This article is general information, not legal or tax advice. Talk to a family lawyer before you sign an agreement. For a plain-language guide, see Family Law in BC's dividing property and debts after you separate.