Splitting matrimonial and investment property

[helenj]

Hi all,

My ex-wife and I jointly own two properties. My ex-wife currently has exclusive possession of the matrimonial home while I am living with a friend. However, I manage the investment property.


They're both valued at $1 Million each and they each carry a mortgage of $500k. Both our names are on both properties.



We were thinking of each keeping one property. So she would keep the matrimonial home and I would keep the investment property.


My question is if this makes financial sense from my perspective? Or am I giving up some financial gains? Her lawyer also wants to lock in the property values at $1 million until Trial (trial can take up to another 9 months). Would appreciate any perspective.


I am also barely breaking even on the investment property.

[Jeff]

Both properties likely have capital gains. However, the capital gains on a primary residence are not taxable and the capital gains on an investment property are. So that should be taken into account.

[Stillbreathing]

I would never agree to lock in the value of the homes until trial. You are very naive if you think trial can take up to 9 months. Try 10 years and counting as in my case.

[Helpmyspouse]

I second that. I'm at 7 years....

[helenj]

Thank you both for your response.


1. What's the problem with locking in the values to both homes? They have the same mortgage and selling value.



2. My ex's lawyer is trying to "settle" the property issue by getting us to lock in the value. What should I be asking for in the agreement?



I may want to move in to the investment property in about a year or so as I can't live with my friend for much longer.



Thank you in advance for your help.

[Kinso]

My question is if this makes financial sense from my perspective? Or am I giving up some financial gains? Her lawyer also wants to lock in the property values at $1 million until Trial (trial can take up to another 9 months). Would appreciate any perspective.

I think someone with this amount of equity could be getting advice from a professional rather than the internet.

I would consider the primary residence tax implications (there may be a way to declare both as your primary residence once you've split). The locked in value seems dumb. Occupational rent.


1. One property might change in value to a greater degree than the other. Even if in similar areas, maybe one will have mold/a fire/some other issue.

2. Get a real estate appraisal or be confident in the number.

[rockscan]

Not to mention that the market is weird right now. Toronto sales are falling but smaller cities are booming. You could lock in a rate and it falls by the time you sell.


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[Helpmyspouse]

Be prepared for your situation to drag on. The lawyers see all that equity so they know their fees are secured. When they say your financials they have already calculated how much they will drain from your family. I don't know how long you've been at this so far but lawyers will stall and drag so they can bill and line their own pockets. It's the cost of divorce and only the lawyers win. I hope your situation will be different but just be aware.