Adding Your Spouse or Partner to Title in BC: Tax, Mortgage and Family Law Effects

You bought your home on your own, and now you are married or living with a partner. Adding them to title can feel like paperwork, but in BC it is a legal transfer of an interest in land, with tax, mortgage and ownership consequences that are hard to undo.

This guide walks through the property transfer tax rules for spouses, why your lender has a say, the choice between joint tenancy and tenancy in common, and the family law questions to ask before anything is registered.

What adding someone to title really does

When you add your spouse or partner to title, you transfer part of your ownership to them. A Form A transfer is prepared and registered at the Land Title Office, and from then on your partner is a registered owner with their own interest in the property. You generally cannot take that interest back later without their agreement or a court order.

After the transfer, both of you have to sign to sell, refinance or add a new mortgage. Your partner's share can also be affected by their own legal problems, such as a judgment registered against them. None of this is a reason not to do it, but it is a reason to decide deliberately.

Property transfer tax: exempt, or not?

Adding a person to title is a taxable transaction under BC's Property Transfer Tax Act, so tax applies unless an exemption fits. The one most couples rely on is the exemption in s 14(3)(b) for transferring a principal residence to a "related individual". A spouse is a related individual, but the Act's definitions matter:

• Spouse has a specific meaning. You must be married, or have lived together in a marriage-like relationship for a continuous period of at least 2 years. A partner of 18 months does not qualify yet.
• Citizenship or permanent residence. For this exemption, the person receiving the interest must be a Canadian citizen or permanent resident.
• Six months of residence. The property must have been the principal residence of you or your partner for a continuous period of at least 6 months immediately before the transfer.
• The property itself. A "principal residence" for this purpose is no larger than 0.5 hectares, with improvements designed and used for no more than 3 families, all classified as residential.

If the land is larger than 0.5 hectares or has non-residential improvements, s 15 may give a partial exemption instead. You still file a property transfer tax return and claim the exemption on it. If the exemption does not apply, tax is payable on the fair market value of the interest your partner receives, so the size of the share you transfer matters. Our separate article on property transfer tax exemptions for family transfers covers transfers between family members more broadly.

Your mortgage lender has a say

Most residential mortgages restrict transfers of the property without the lender's consent. Before you add anyone to title, contact your lender. Depending on its policies, the lender may:

• consent and ask your partner to sign as a borrower or guarantor of the existing mortgage;
• require a new mortgage or an amendment, sometimes with fees or a new qualification process; or
• decline, which leaves you to choose between waiting and refinancing elsewhere.

Transferring without dealing with the lender can put you in breach of your mortgage terms. Your lawyer will usually coordinate the lender's requirements with the transfer so they are registered together.

Joint tenancy or tenancy in common

When land is transferred to two or more people, s 11 of the Property Law Act presumes they hold it as tenants in common unless the transfer shows a contrary intention. So the form of ownership is a choice you make on the transfer, not a default you can ignore.

• Joint tenancy. You each own the whole together. On the death of one, the survivor generally takes the property by right of survivorship, outside the estate.
• Tenancy in common. You each own a defined share, which does not have to be 50/50. On a death, the deceased's share passes under their will.

If either of you has children from an earlier relationship, the difference can be significant. Our guide to joint tenants vs tenants in common explains both in more detail, and it is a good moment to update your wills so they match what you put on title.

The family law side, briefly

Title is only part of the picture if you later separate. Under BC's Family Law Act, property one spouse owned before the relationship can be excluded property, and s 85(3) says that exclusion applies despite a transfer of ownership from one spouse to the other. The details, including increases in value and when a court may divide excluded property, are covered in our article on a home owned before the relationship. If you want certainty, many couples pair the transfer with a marriage or cohabitation agreement.

A short checklist before you sign

• Confirm whether you meet the 2-year spouse definition and the 6-month residence rule on the date of transfer.
• Speak to your lender early and get its conditions in writing.
• Decide on joint tenancy or tenancy in common, and on the shares if you choose the latter.
• Review your wills and any agreement between you so they line up with the new title.
• Ask your tax adviser whether the transfer has any income tax implications in your situation.

The same issues come up, with some differences, when parents add an adult child to title; see the risks of adding a child to title.

Thinking about adding your partner to title? Get the transfer right first

Our real estate lawyers can check whether the property transfer tax exemption applies, deal with your lender, prepare and register the transfer at the Land Title Office, and explain the ownership options before you sign.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.