Your New Math Matrimonial Home Buyout Calculator

A recent Ontario family law case addressed the issue of whether one spouse can buy out the other’s interest in a jointly held Matrimonial Home. In this case, the husband pursued an uncontested trial, meaning the wife did not participate.

He requested a six-month order to purchase the wife’s interest in the Matrimonial Home. He asked that the home be sold on the open market if unable. Consequently, the trial judge ordered the Matrimonial Home to be sold, providing two primary reasons.

Firstly, the judge highlighted that the Ontario Court of Appeal has established that judges lack the authority or jurisdiction to grant a right of first refusal or to mandate the purchase of the other spouse’s interest in the Matrimonial Home.

Secondly, the judge explained that allowing such an order would undermine the property’s competitive market value, as it would not be subjected to open market bidding.

Accordingly, the court-mandated the home’s sale but clarified that the husband could participate in bidding like any other interested buyer.

In mediation, couples facing divorce can control how the matrimonial home is handled, providing a more collaborative and flexible approach than court proceedings.

Here’s how mediation empowers the parties involved:

Joint Decision-Making:

Mediation places the decision-making power directly in the hands of the spouses. Unlike a court ruling, which a judge determines, mediation allows both parties to discuss and agree on the fate of the marital home, ensuring that the outcome aligns with their preferences and needs.

Creative Solutions:

Mediation offers a platform for creative problem-solving. The parties can explore various options for the marital home that might not typically be considered in a court setting. For instance, they can agree on one spouse buying out the other’s share, leasing the property and sharing the income, or even maintaining joint ownership for a specified period.

Non-Adversarial Setting:

The mediation process is inherently collaborative, aiming to reduce conflict and foster a cooperative environment. This setting helps both parties communicate more effectively and work together towards a mutually beneficial solution regarding the matrimonial home.

Confidentiality:

Unlike public court proceedings, mediation is a confidential process. This privacy allows the parties to discuss and negotiate openly, without fear of public exposure or future legal prejudice, leading to more honest and productive negotiations.

Cost and Time Efficiency:

Mediation can be more time and cost-effective than court litigation. By reaching an agreement on the marital home through mediation, parties can avoid the prolonged and expensive court trial process.

Personalized Agreements:

Mediation acknowledges that every family’s situation is unique. It allows the parties to tailor the agreement to their specific circumstances, needs, and plans concerning the matrimonial home, leading to more satisfying and sustainable outcomes.

By participating in mediation, both parties can engage in a constructive dialogue, explore various options for their matrimonial home, and reach a consensus that respects both of their interests and wishes, ultimately taking back control over this significant aspect of their separation.

Deciding whether to buy out your ex-spouse’s part of the matrimonial home is a complex financial decision that should be made after careful consideration of various factors.

Consider your financial situation and ability to afford the buyout and any potential tax implications, legal fees, and future housing costs. Consulting with a financial professional, such as a Certified Divorce Financial Analyst (CDFA), can help assess your financial situation and provide guidance on the potential outcomes of different scenarios.

A CDFA can also help you and your ex spouse negotiate a fair and equitable settlement considering both short-term and long-term financial needs and goals. In addition, they can provide financial projections and help you understand the potential impact of different settlement options on your financial future.

Overall, it’s essential to carefully consider your options in the divorce process by seeking professional advice before deciding on buying out your partner’s equity in the matrimonial home.

I understand how stressful home-buying can be for people going through a divorce. That is why, to make the spousal buyout process more accessible and exact, I propose using the DTSW Home buyout calculator, found below on this page.

You may be wondering about a few things, like how lump sum support works, whether you can dip into your RRSP or pension funds to pay your spouse or even offset the equalization your spouse owes you. And is there any government programs that help? These are all valid questions; read on for answers.

Canada Mortgage & Housing Corporation (CMHC) Spouse Buyout plan

Canada Mortgage & Housing Corporation (CMHC) has a “Spouse Buyout Plan” The CMHC Spouse Buyout Plan is a programme that lets divorcing couples buy out their ex-spouse’s equity share and restructure their shared mortgage. This can be a complex procedure.

As a CDFA, I’ve seen firsthand the advantages of a CMHC Spouse Buyout plan. It provides a mechanism to gracefully detach from a shared mortgage and help each party move forward with a sense of financial stability in their post-divorce lives. With this strategy, one partner can remain in their home while the other receives a fair settlement, and both parties can move forward with renewed hope.

Accessing RRSP investments to finance the spousal buyout of the matrimonial home via the CRA Home Buyers Plan (HBP), can be a beneficial alternative source of funds for a spousal buyout. The HBP lets eligible individuals withdraw up to $35,000 tax-free from their RRSPs to use towards the buyout or the purchase of another property.

This can be a beneficial alternative for those going through a divorce or separation because it can make available tax-sheltered funds needed to finance the buyout without triggering tax implications.

As with any financial decision, it is critical to seek professional advice to ensure you understand the implications.

I know you might be wondering about a few things regarding your mortgage situation. You might be curious if it’s possible to transfer a joint mortgage to just one person or how mortgages are divided after a divorce. You could also be asking how to remove someone from your mortgage without refinancing or simply changing the name on the mortgage. And of course, you may want to know how to remove your spouse from your mortgage too. Let’s dive into these questions together!