Buying Out Your Spouse's Interest in the Family Home After Divorce

Divorce brings countless decisions, and one of the most significant involves the family home. For many couples, the house represents not just their largest asset but also emotional ties and stability, especially when children are involved. If you want to keep the home after divorce, can you simply buy out your spouse's interest? And what happens if you can't agree on the terms?

Can You Purchase Your Spouse's Interest?

Yes, buying out your spouse's share of the family home is a common solutions when divorcing couples want to avoid selling the property. This arrangement allows one spouse to retain ownership while compensating the other for their share of the equity.

How a buyout typically works:

The process usually involves determining the home's current market value, calculating the equity (market value minus any outstanding mortgage), and then one spouse purchases the other's portion of that equity. For example, if your home is worth $500,000 with a $200,000 mortgage, there's $300,000 in equity. If you own the home jointly, you would need to pay your spouse $150,000 for their half. Disposition costs may be calculated in addition to the mortgage.

Financing the buyout:

You can accomplish this through several methods: refinancing the mortgage to cash out equity, using other marital assets as a trade-off (like retirement accounts or investments), obtaining a new loan, or using personal savings. Many people choose to refinance, which also removes the other spouse from the mortgage obligation.

When Spouses Don't Agree: What's the Default?

Disagreements about the family home are common during divorce. Perhaps one spouse wants to keep it while the other insists on selling, or you can't agree on the home's value or buyout price. When negotiation fails, what happens next depends on your jurisdiction and circumstances.

Court-ordered sale:

In most cases, if spouses cannot reach an agreement about the family home, and they are both on title, the default outcome is that a court will order the property to be sold. The proceeds are then divided according to state law and the specifics of your case. This is often called a partition sale or forced sale.

How courts decide:

Before ordering a sale, courts consider several factors including whether minor children live in the home, each spouse's financial ability to maintain the property, who has primary custody of children, contributions each spouse made to the property (both financial and non-financial), and any domestic violence or safety concerns.

In some situations, a court might award the home to one spouse, particularly when children are involved and keeping them in the family home serves their best interests. However, this typically requires that spouse to compensate the other for their share, either immediately or over time through other property division.

Ontario law specifics:

In Ontario, property division upon divorce is governed by the Family Law Act. The Act uses an "equalization of net family property" approach, where the spouse with the higher net family property pays half the difference to the other spouse. The matrimonial home receives special treatment under Ontario law—both spouses have an equal right to possession regardless of whose name is on the title, and neither spouse can sell or mortgage the home without the other's consent or a court order.

Protecting Your Interests

If you want to keep the family home or ensure you receive a fair buy out for your share, consider these steps:

Get a professional appraisal from a licensed appraiser rather than relying on online estimates. Understand all costs of ownership including mortgage payments, property taxes, insurance, maintenance, and utilities. There may also be costs with breaking your mortgage and other disposition costs.

The Emotional Factor

Remember that the family home often carries emotional weight that can cloud financial judgment. While it's natural to feel attached to your home, make sure keeping it makes financial sense for your future. Can you afford the mortgage and upkeep on a single income? Is the home too large for your post-divorce needs? Sometimes a fresh start in a new place is the healthier choice.

Moving Forward

Whether you're buying out your spouse, being bought out, or facing a potential sale, professional guidance is invaluable. A qualified family law lawyer can help you understand your rights and options, while a financial advisor can help you assess whether keeping the home makes sense for your long-term financial health.

The family home represents both practical considerations and emotional ties, but approaching these decisions with clear information and professional support will help you make the choice that's truly best for your future.