Spouse... One Word. Three Definitions.

On Monday I made a video on land transfer tax, specifically the first-time buyer rebate and how it works in Ontario.

One piece of that video that always gets questions is the spousal rule for the rebate.

Who counts as a spouse? What if only one of the buyers has prior ownership? What if the spouse owned a home before the relationship?

These are good questions. And they open up something I find genuinely interesting about real estate law: the word "spouse" doesn't have one definition.

It has several. And which one applies depends entirely on what you're trying to determine.

In a single transaction, the same couple can be spouses for one purpose and not spouses for another. The definitions don't all line up.

Here are the three contexts where it comes up — and which definition governs each one.

Land Transfer Tax

Whenever we're dealing with Land Transfer Tax. We're using a definition of spouse that comes from Section 29 of the Family Law Act.

This would apply to the determination of the land transfer tax rebate or spousal exemptions when transferring title

Under this definition of spouse, spouses are:

• two married persons,
• or two people who have cohabited continuously for at least three years,
• or two people who are in a relationship of some permanence and are the parents of a child together.

Common-law couples qualify. But the threshold here is three (3) years.

Matrimonial Home and Spousal Consent

This is the narrower definition of spouse.

The matrimonial home protections under the Family Law Act, including the requirement for spousal consent on a sale or mortgage, use the definition of spouse in Section 1 of the Family Law Act.

Yes, the Family Law Act has two different definitions of spouses...

Here it defines a spouse as:

• Two people who are married to each other.

That means a common-law couple of ten years has no matrimonial home rights. No consent requirement. No possessory rights under the FLA.

Law Society of Ontario Rules

Whether a lawyer can act for both parties in a real estate transaction is governed by the Law Society's Rules of Professional Conduct.

There is typically a requirement for two lawyers in the transfer of real estate.

However, one of the exceptions to this rule is if:

The transferor and the transferee are related persons as defined in Section 251 of the Income Tax Act.

Of course, the Income Tax Act also has its own definition.

For the purpose of this Act, related persons, or persons related to each other, are

(a) individuals connected by blood relationship, marriage or common-law partnership or adoption;

And Common-Law Partner is defined as:

common-law partner, with respect to a taxpayer at any time, means a person who cohabits at that time in a conjugal relationship with the taxpayer and

(a) has so cohabited throughout the 12-month period that ends at that time,

So we have a different timeline for determination of common-law partner under the Income Tax Act.

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One word. Three definitions. The answer changes depending entirely on what you're asking.

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