How Is Property Divided in a Divorce? Legal Guidance for Canadian Couples

Divorce is tough emotionally, mentally, and often financially. One of the most stressful parts of ending a marriage is figuring out who gets what. Who keeps the house? What happens to your joint savings? What if there’s a pension or a business involved?

This article breaks down how property division works in Canadian divorces, what your rights are, and how getting the right legal support can protect your financial future.

But what exactly is property division according to Canadian law? Let’s see below.

What Counts as Property in a Divorce?

First, let’s be clear—"property" isn’t just the house or car. It includes:

• Homes, cottages, and real estate

• Vehicles and recreational equipment

• Bank accounts and savings

• RRSPs, pensions, and investments

• Business interests

• Jewelry, artwork, and valuables

• Household contents and furniture

• Debts (yes, these are considered too)

All of this falls under division of property in divorce, but not everything is treated the same way. Below, you will find out how property can be handled differently after marriage.

How Canada Handles Property Division: The Equalization Process

Divorce doesn’t mean splitting everything down the middle. Instead, we use something called equalization of net family property. Here’s what that means:

1.       You each figure out how much you own on the day you separate.

2.       You subtract what you owed and what you owned when you got married.

3.       The person with more “net family property” pays the other half the difference.

This isn’t about sharing every item. It’s about fairly dividing what each person gained during the marriage.

What Property Can You Keep?

Some things are excluded from equalization. You may not have to share:

• Gifts or inheritances (if kept separate)

• Personal injury settlements

• Life insurance proceeds

• Property acquired after separation

But here’s the catch: If you used that inheritance to buy your family home, for example, it might not be excluded anymore. That’s why tracing assets and getting legal advice early is so important in divorce and property division cases.

The Case of The Matrimonial Home

The family home, also called matrimonial, is treated differently. Even if it was in your name before the marriage, its full value counts in the property division.

And after separation, both spouses have the right to stay in the home unless the court says otherwise. It doesn’t matter whose name is on the title.

This often becomes a flashpoint in divorce, which is why many people turn to a family lawyer to navigate property and housing arrangements.

Property Division in a Common-Law Relationship

If you’re not legally married, the rules differ. Common-law couples don’t automatically share property the same way married couples do, however, they might have to prove financial contributions or rely on agreements made as a couple.

And of course, debts are included too. Mortgages, credit cards, car loans, and lines of credit all count.

Each partner’s debts get subtracted from their assets when calculating net property. If one person took on more debt, that changes what they owe, or receive, in the equalization.

All the above points make legal guidance especially important for common-law property division.

How Equalization of Net Family Property Works

Let’s say Alice and Mark are getting divorced after 10 years of marriage.

Alice has $300,000 in assets and brought $50,000 into the marriage.

Mark has $180,000 in assets and brought in $20,000.

So:

Alice’s net family property: $300,000 - $50,000 = $250,000

Mark’s net family property: $180,000 - $20,000 = $160,000

The difference is $90,000. To equalize, Alice would pay Mark $45,000. Simple in theory, but getting to these numbers in real life? That’s where good legal help comes in.

Why You Need a Lawyer for Property Division

Even when things start amicably, dividing property can get complicated fast. Emotions run high, and financial documents can be hard to track or understand.

Here’s how a family lawyer helps:

• They protect your legal rights and financial future

• They identify hidden or undervalued assets

• They ensure debts are accounted for fairly

• They prepare and review separation agreements

• They represent you in court, if needed

At Michael Iyore Law, we’re committed to helping you make informed, empowered decisions—whether you're dividing a home, a pension, or a family business.

Move Forward With Confidence

Going through a divorce and property division process is hard enough. Don’t make it harder by trying to handle the financial side alone. Get clarity, protect your assets, and find peace of mind by working with a trusted legal team.

If you're dealing with the division of property in divorce, Michael Iyore Law is here to help. We bring experience, empathy, and strategy to every case.

Book a consultation today, and let’s talk about the next step forward, for you and your future.

Disclaimer: This content is not legal advice. To speak with a lawyer at our office, please schedule a consultation at the link below:

https://www.michaeliyorelaw.ca/contact-us