Dividing Additional Real Property
What Is Additional Real Property?
When couples in British Columbia separate, they need to decide how to divide any Additional Real property they own, such as vacation homes, rental properties, or land. These properties are considered family property and are usually divided equally between the spouses.
Additional Real Property includes any real estate owned by either spouse, aside from the family home. This can be cabin or cottage, rental properties, undeveloped land, or commercial properties etc.
How is Additional Real Property divided?
In British Columbia, the Family Law Act states that all family property should be divided equally between spouses upon separation. This includes Additional Real Property, regardless of whose name is on the title. However, if one spouse owned the property before the relationship, the original value of that property is considered excluded property and is not divided. Only the increase in value during the relationship is shared.
For example: If a spouse owned a rental property worth $200,000 before the relationship, and it's worth $300,000 at separation, the $100,000 increase in value is considered family property and is divided equally.
Options for dividing Additional Real Property
Spouses can choose different methods to divide Additional Real Property:
Sell the property: The property can be sold, and the proceeds divided according to the agreement.
One spouse buys out the other: One spouse can pay the other for their share, becoming the sole owner.
Co-ownership: In some cases, spouses may choose to continue owning the property together, especially if it's a source of income, like a rental property.
Important considerations
When dividing additional real property, it's important to:
Determine the Current Market Value: Get a professional appraisal to know the property's worth.
Understand Tax Implications: Be aware of any taxes that may arise from selling or transferring property.
Consider Ongoing Expenses: Think about maintenance costs, property taxes, and other expenses related to the property.
It's advisable to consult with a family lawyer to understand your rights and ensure a fair division of property during separation.
Continue Reading
Important Disclaimer
Content and videos in The Divii Knowledge Centre provide general information about separation and divorce and is not and should not be considered legal advice. For guidance specific to your situation, it's important to consult with a qualified family lawyer in your area. It's always highly recommended to seek independent legal advice during your separation.