How to Transfer House Title After Divorce in Ontario

When one spouse keeps the matrimonial home after divorce, two separate legal actions need to happen: transferring the title and releasing the departing spouse from the mortgage. Most people handle the title transfer and assume they are done — leaving the departing spouse still on the hook for a mortgage on a home they no longer own.

Here is how to do both correctly.

Step 1: Understand the Land Transfer Tax Exemption

Ontario normally charges Land Transfer Tax (LTT) on property transfers — on a $600,000 home, that would be $8,475 in provincial LTT alone (plus Toronto's municipal LTT if applicable).

Under Regulation 696 of the Land Transfer Tax Act, transfers between spouses or former spouses are exempt from LTT if:

• The transfer is made under a written separation agreement or court order
• The only consideration (payment) for the transfer is the assumption of the existing mortgage

This exemption applies whether you transfer during separation or after the divorce is finalized. It can save tens of thousands of dollars.

Step 2: Hire a Real Estate Lawyer

Property title transfers in Ontario are processed electronically through the Teraview system. Only licensed real estate lawyers or authorized law clerks can register transfers in Teraview.

Your lawyer will:

1. Prepare the electronic Transfer Instrument
2. Complete the Land Transfer Tax Affidavit
3. Select the correct Teraview compliance statements — Statements 9085 and 9087 (confirming the transfer is in compliance with a written agreement to live separate and apart) — to claim the Regulation 696 exemption
4. Register the transfer with the Land Registry Office

Expected legal fees: CA$300 to CA$1,500+ depending on complexity, plus the Teraview electronic registration fee of approximately CA$85.

Step 3: Secure a Mortgage Release (Critical)

This is the step most people miss. Transferring title removes the departing spouse's name from the deed. It does not remove them from the mortgage.

The mortgage is a separate contract between both spouses and the lender. If the departing spouse's name stays on the mortgage and the remaining spouse defaults, the lender can — and will — sue the departing spouse for the full balance.

To fully sever the departing spouse's liability:

1. The remaining spouse must refinance the mortgage solely in their own name, proving they can qualify independently
2. The lender issues a formal Release of Covenant to the departing spouse
3. The departing spouse receives written confirmation that they are no longer liable

This refinancing process requires the remaining spouse to pass the lender's affordability and credit checks. If they cannot qualify, the parties may need to sell the home instead.

Step 4: Handle the Matrimonial Home Exception

Under Ontario's Family Law Act, the matrimonial home gets special treatment in Net Family Property (NFP) calculations. If a spouse owned the home before the marriage and it was the family residence on the date of separation, they cannot deduct its pre-marriage value from their NFP.

This means the full value of the home on the separation date is included in the equalization calculation — a rule that catches many people off guard during property division.

Your separation agreement should already account for this. If it does not, consult a family lawyer before completing the title transfer.

Timeline and Costs at a Glance

Common Mistakes

Transferring title without a mortgage release. The departing spouse remains liable for the full mortgage balance — potentially hundreds of thousands of dollars.

Not claiming the LTT exemption. If your lawyer does not select the correct Teraview statements, you may be charged the full Land Transfer Tax. Confirm they are using Statements 9085 and 9087.

Delaying the transfer. While there is no legal deadline, leaving both names on the title after divorce creates complications for any future sale, refinancing, or estate planning.

The title transfer is one of the highest-stakes steps in the post-divorce process. The Ontario After-Divorce Checklist puts it in the correct sequence alongside every other administrative task — so the mortgage release happens before the title transfer, not after.

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