Transfer of Title Between Spouses

Transfer of title between spouses occurs when a person is added or removed from property ownership or title by the owner. Subject to certain exceptions, land transfer tax is payable on every transfer of land in Ontario based on the amount of consideration that is being transferred . Transfer of title may be done for various reasons, such as adding a spouse or partner on title, removing a previous owner, or updating ownership structure following either separation or divorce, or to fulfill mortgage and refinancing requirements, and survivorship applications to gain sole ownership of a property upon the death of a joint title holder.

Transfers between spouses and former spouses are not subject to land transfer tax and are exempted transfers for the purpose of land transfer tax per Regulation 696 R.S.O. 1990 made under the Land Transfer Tax Act, if the said transfer is one out of “natural love and affection” when there is no money passing between the spouses, or if the only consideration passing is the assumption of a mortgage. However, if one spouse is truly purchasing an interest in property, the land transfer tax will be applicable.

For land transfer tax purposes, a “spouse” includes two persons who are:

  1. Legally married, or
  2. Who are not married, and
    1. Cohabited continuously for a period of not less than three years, or
    1. Cohabited in a relationship of some permanence, if they are the natural or adoptive parents of a child.

The Land Transfer Tax Act also provides an exemption of land transfer tax for transfers for former spouses in compliance with a written separation agreement, pursuant to which the parties agree to live separate and apart. In this circumstance, the amount of money being paid to a former spouse as noted in the separation agreement would be exempt from land transfer tax.

We can walk you through the steps of transferring title between spouses and ensure that the process is as smooth as can be. Contact us today!