What Common-Law Partners Need to Know Before Buying Property Together
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What Common-Law Partners Need to Know Before Buying Property Together

ByStan S.

The Common-Law Homeownership Landscape in Canada

For many Canadians, homeownership is a significant milestone, and for common-law partners, it comes with unique financial and legal considerations. Unlike married couples, common-law partners may not have automatic rights to shared property in the event of a breakup, making proactive planning essential.

One of the most important factors to consider is that the legal status of common-law partnerships varies across Canada. In some provinces, common-law partners have similar rights to married couples, while in others, they may need legal agreements to protect their financial interests. Understanding these regional differences is crucial before purchasing property together.

Key Steps Before Buying a Home Together

1. Discuss Financial Contributions and Responsibilities

  • Determine how expenses, mortgage payments, and home maintenance costs will be divided.
  • Decide whether ownership will be equal or reflect individual contributions.
  • Have an open discussion about credit scores and mortgage qualification.

2. Choose the Right Ownership Structure

  • Joint Tenancy: Each partner owns an equal share, and if one passes away, their share automatically goes to the other.
  • Tenancy in Common: Ownership shares can be unequal, and each partner can pass their share to someone else in their will.
  • Consulting a real estate lawyer to decide which structure suits your situation is advisable.

3. Sign a Cohabitation or Property Agreement

  • Outline each partner’s rights and responsibilities in case of a separation.
  • Clarify financial obligations, contributions, and plans for selling the property.
  • This agreement can help avoid legal disputes if the relationship ends.

Financial Considerations for Common-Law Homebuyers

Mortgage Qualification and Financing

  • Lenders assess each applicant’s financial health separately, so one partner’s lower credit score can affect mortgage approval.
  • If one partner contributes significantly more to the down payment, consider how this will be reflected in ownership agreements.
  • Using the First-Home-Savings Account (FHSA) if you are a first time home buyer may help you to save for a qualifying first home tax-free (up to certain limits).

Tax and Estate Planning

  • common-law partners may not have any rights to a deceased partner’s estate unless specified in a will.
  • Reviewing estate plans and updating wills ensures property and assets go to the intended party.

What Happens if You Separate?

Unlike married couples, common-law partners may not have automatic property division rights. If the relationship ends, property ownership may depend on:

  • Title registration (whose name is on the deed/title)
  • Financial contributions (whether one partner paid more into the home)
  • Legal agreements (a cohabitation or property agreement can clarify division terms)

If no agreement exists, the partner who contributed more financially may have to prove their stake in the home through legal action. Consulting a family law lawyer before or during a property purchase can help mitigate future disputes.

Final Thoughts: Protect Your Investment and Relationship

Buying a home as common-law partners is an exciting milestone, but careful planning is essential. By understanding legal rights, structuring ownership appropriately, and creating a clear financial plan, partners can protect their investment and ensure a smooth homeownership experience.

Next Steps: If you’re considering buying a home with your partner, consult a real estate lawyer and mortgage advisor to structure the purchase correctly. Ensure ownership arrangements and financial contributions are properly documented in writing. Smart planning today can prevent costly disputes in the future.

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