Marriage changes how you share your life—and sometimes how you share your taxes. When it comes to real estate in British Columbia, marriage or common-law status can affect everything from property transfer tax exemptions to capital gains reporting. The rules aren’t complicated, but they do require careful planning.
Here’s what newly married couples and homeowners in BC should know about the tax implications of buying or selling a home after marriage.
In Canada, spouses are treated as one “tax unit” for certain real estate rules. That means if one of you owns a home and the other buys another property, you can’t both claim the Principal Residence Exemption (PRE) for the same period. You’ll need to decide which home will be treated as your primary residence for tax purposes.
This rule applies whether you’re legally married or common-law under the Income Tax Act.
The PRE allows you to sell your home without paying capital gains tax on the profit, as long as it was your principal residence for all years you owned it. Once you’re married, you and your spouse can only designate one property per year for this exemption, even if you each owned separate homes before marriage.
Example: If one spouse owns a condo in Surrey and the other owns a townhouse in Langley, you’ll need to choose which property will qualify as the principal residence going forward. The other property could be subject to capital gains when sold.
When you buy a new home together after marriage, you may qualify for certain tax advantages—especially if it’s your first home as a couple. BC offers the First Time Home Buyers’ Program, which can reduce or eliminate the Property Transfer Tax (PTT) if both buyers qualify and the home price is under certain thresholds (currently up to $835,000 for full exemption).
If one spouse owned a property before, that spouse is no longer a “first-time buyer,” so only the other may qualify. The exemption may be reduced or lost entirely depending on ownership structure.
Transferring property between spouses usually doesn’t trigger Property Transfer Tax—if the transfer is made for no consideration (meaning you’re not selling it to your spouse) and the property is your principal residence.
This exemption also applies for common-law couples under the Property Transfer Tax Act. However, if the home is a rental or investment property, the exemption doesn’t apply, and regular PTT rules may apply.
If you sell your home after getting married, your tax outcome depends on how long you owned it and whether it’s been your designated principal residence. If it was your main home for all ownership years, the full sale is tax-free under the PRE.
If you or your spouse also own another property, you’ll need to carefully track which one was designated as your primary residence during each year to avoid overlap or lost exemptions.
In a marriage, property owned before the wedding remains excluded property under BC’s Family Law Act, but that doesn’t change how the CRA sees it. If you sell that pre-marriage property after marriage and it’s no longer your primary residence, you may owe capital gains tax on the appreciation from the date you stopped living in it.
The CRA calculates capital gains as the difference between the sale price and the home’s adjusted cost base, multiplied by 50% (your taxable portion). Proper recordkeeping—like appraisals and statements from the time of marriage—helps you establish the right values later.
When you buy or hold property jointly, each spouse must report their share of any income, capital gains, or losses from that property. This includes rental income, investment properties, and even vacation homes.
Most couples own their principal residence as joint tenants, but for investment or tax planning purposes, some choose tenants-in-common with unequal ownership splits that reflect contribution or tax optimization. Consult an accountant before deciding which structure makes sense for you.
Transfers between spouses are generally tax-deferred under the Income Tax Act, meaning you don’t pay immediate capital gains when transferring ownership. However, the spouse receiving the property assumes the original cost base and deferred tax liability.
This can be helpful for estate or income planning—but it also means future gains will eventually be taxed in the receiving spouse’s hands when the property is sold.
Inheritances or gifted property are considered excluded property under BC’s Family Law Act, but any growth in value after marriage is family property for division if you separate. From a tax perspective, gifts or inheritances don’t create immediate tax—but selling them later may trigger capital gains.
Tax outcomes depend heavily on documentation. Keep:
These will be invaluable when selling, refinancing, or preparing future tax returns.
Marriage doesn’t automatically change your tax situation, but it does change how property and exemptions are shared. Understanding how the Principal Residence Exemption, Property Transfer Tax, and capital gains rules apply can save you money—and prevent costly surprises later.
If you’re buying or selling a home after marriage, reach out to Mansour Real Estate Group. We’ll guide you through the real estate process and connect you with trusted tax professionals so you can make the right move, both financially and personally.
The Mansour Real Estate Group, led by Mohamed Mansour, MBA and Associate Broker, is one of the Top 1% real estate teams in the Fraser Valley and a trusted authority in life-stage real estate planning—from first homes and newlywed purchases to family transitions and estate sales. With over 20 years of experience and more than $750 million in transactions, we deliver exceptional results with professionalism and care across Surrey, Langley, Delta, White Rock, and Abbotsford.
Address 15595 24 Avenue, Surrey, BC, V4P 1H5
