Additional Real Property refers to any real estate owned by one or both spouses other than the family residence.

This can include vacation homes, cabins or cottages, rental properties, commercial buildings, farmland, or undeveloped land. Even if only one spouse’s name is on title, Additional Real Property is often considered family property under the Family Law Act.

Like the family residence, these properties are frequently high value assets and can play a significant role in the overall division of property on separation.

In British Columbia, the Family Law Act generally requires that family property be divided equally between spouses upon separation. This includes Additional Real Property, regardless of whose name is on title or who managed the property during the relationship.

If the property was acquired during the relationship, the starting point is an equal division of the equity.

If one spouse owned the property before the relationship began, the analysis is similar to the family residence. The equity that existed at the start of the relationship is usually considered excluded property and remains with the original owner. Any increase in equity during the relationship is considered family property and is divided equally.

There may also be exclusions if one spouse used a gift or inheritance that was given only to them to purchase or improve the property, provided that contribution can be clearly traced.

The first step is determining the fair market value of the property. This often involves obtaining an appraisal, especially if one spouse is considering keeping the property or if there is disagreement about value.

Next, you must identify any debts registered against the property, such as mortgages or lines of credit. These debts are legally connected to the property and should be listed with it, not as general debt.

When you subtract the registered debt from the fair market value, you are left with the equity. It is the equity that is divided between spouses.

For income producing properties, it is also helpful to understand rental income, expenses, and whether the property is operating at a profit or loss, as this can affect negotiations and future planning.

There are several common ways spouses choose to deal with Additional Real Property.

• Sell the property and divide the proceeds according to the agreement
• One spouse buys out the other’s share and becomes the sole owner
• Continue to co-own the property for a period of time, particularly if it is income producing

Each option has different financial, tax, and practical implications, and the right choice depends on affordability, timing, and long term goals.

In some cases, spouses choose to continue co-owning Additional Real Property, such as a rental property or vacation home.

If you co-own a property after separation, it is important to clearly define how income, expenses, repairs, and major decisions will be handled. You should also specify how and when either spouse can trigger a future sale or buyout.

Clear terms reduce the risk of conflict and help ensure the arrangement remains workable over time.

Additional Real Property often comes with tax consequences, particularly capital gains tax.

You should consider whether capital gains tax will be payable on a sale or triggered in the future, and how that tax will be allocated between spouses. Speaking with an accountant can help you understand the potential tax exposure, and a family lawyer can ensure your Separation Agreement includes clear provisions addressing tax responsibility.