Living together without marrying changes your finances in two separate ways. For federal tax and benefits, a common-law partner is treated much like a spouse once the CRA’s test is met. For property, support and inheritance, provincial law decides, and in several provinces a common-law partner has far fewer automatic rights than a married spouse. This page covers that second, larger gap and how couples protect themselves. It is part of our guide to life stages and life events.
When common-law status begins
For tax purposes, you are common-law after living together in a conjugal relationship for a set period, or sooner if you have a child together; the exact test, and when to tell the CRA, are in am I common-law for tax purposes. Once it applies, benefits such as the Canada Child Benefit and the Canada Groceries and Essentials Benefit (formerly the GST/HST credit) are calculated on family income, and partners can use spousal RRSPs and pool some credits, as married couples do.
Provincial family law uses its own, usually longer, periods for support and property claims, and they differ by province. The qualifying periods for spousal support are listed on the spousal support calculator.
Common-law vs married: where the differences are
| Issue | Married | Common-law |
|---|---|---|
| Federal income tax and benefits | Treated as a couple | Treated as a couple once the CRA test is met |
| Property division on a breakup | Provincial family property rules apply | Depends on the province: in some, partners who meet a cohabitation period are treated like spouses; in Ontario the property rules apply to married spouses only; Quebec gives de facto partners no property regime |
| Spousal support | A court can order it | A court can order it once the provincial qualifying period or conditions are met (not in Quebec) |
| Inheritance with no will | The spouse inherits under provincial intestacy rules | A partner may receive nothing in some provinces |
| Workplace pension survivor benefits | The spouse is usually eligible | Usually eligible if the plan’s definition is met |
| OAS and GIS | Combined income counts | Combined income counts |
Because a partner who dies without a will may leave a common-law survivor with nothing, the rules in what happens if you die without a will matter more for unmarried couples.
Protecting yourself
A cohabitation agreement
A cohabitation agreement sets out who owns what, how property and debts are split if you separate, whether support will be paid, and what happens on a death. In most provinces it becomes a marriage contract if the couple later marries. What these agreements can and can’t cover, and what makes them enforceable, is explained in prenuptial agreements and cohabitation agreements.
Title, accounts and designations
| Asset | What to decide |
|---|---|
| Real estate | Joint tenancy or tenancy in common; see joint tenancy vs tenants in common |
| Bank accounts | Joint or separate, and who is liable for overdrafts |
| TFSA | Naming your partner successor holder or beneficiary; see updating a TFSA beneficiary |
| RRSP and insurance | Beneficiary designations, which pass outside the will |
| Vehicles | Whose name is on the registration and the loan |
Renting together
With both names on the lease, both partners have the tenant’s rights and both are responsible for the rent. If only one partner signs, the other may have no right to stay if the signer leaves. Ending a lease early is covered in how to break a lease early. Tenant insurance can be one policy naming both partners or a separate policy for each.
Buying a home together
Unmarried buyers choose how to hold title, and often sign a co-ownership agreement that records each person’s share of the down payment and what happens if one wants out. Joint tenancy passes the home to the survivor automatically; tenancy in common lets each owner leave a share by will. How the purchase itself differs for common-law and married buyers (mortgage qualification, first-time buyer programs) is covered in buying a home common-law vs married. A will, life insurance and powers of attorney fill the gaps provincial law leaves for unmarried owners.
Breaking up
| Task | When |
|---|---|
| Tell the CRA your marital status changed | After you have been separated for the period the CRA uses |
| Close or freeze joint bank accounts and credit | As soon as possible |
| Update beneficiaries | RRSP, TFSA, insurance |
| Divide property | Under your agreement, or provincial law if there isn’t one |
| Change locks and passwords | As needed |
Whether a common-law partner can claim a share of property, and how much, depends on the province and on how long the couple lived together. The full separation checklist (documents, the home, registered plans, the new budget) is in the divorce and separation financial checklist, most of which applies to common-law couples too.