Quick answer
Buying out a co-owner means one owner pays the other for their interest and ends up owning the whole property. The usual steps are to agree on a value and a price in writing, arrange financing and deal with any mortgage, register a transfer, and pay land transfer tax on the consideration. If the co-owners cannot agree, any person interested in the land can apply to court under the Partition Act, and the court can order a sale.
The Partition Act does not give one co-owner a right to buy out another, so a buy-out normally depends on the other owner’s agreement. Have a lawyer review the terms and the title before you sign.
Co-owners split up for many reasons: a relationship ends, an investment partnership runs its course, or one owner wants to stay while the other wants out. A buy-out can be quicker and cheaper than a forced sale, but it needs a clear agreement, financing and a correct transfer. This article walks through the steps, the tax and what to do if the other owner will not agree. See also our article on forcing the sale of jointly owned property.
How a Buy-Out Works
- Check how title is held. Joint tenants and tenants in common hold their interests differently, and the registered title shows who owns what. See our article on joint tenancy vs tenants in common.
- Agree on a value. An independent appraisal is a common starting point, and a co-ownership agreement may already set a method. Get the value in writing.
- Agree on the terms in writing. The agreement should state the price, who pays the mortgage and other costs, when payment is due, the date of the transfer and what happens to any items or deposits.
- Arrange financing. The buying owner may need a new or refinanced mortgage. Co-owners need to work with a financial institution on the mortgage, and the existing lender has to be dealt with, so speak to the lender early. See our refinancing service.
- Register the transfer. Your lawyer prepares the transfer of the leaving owner’s interest, registers it electronically and pays the land transfer tax. See our lawyer fees guide for the government registration fee.
- Update insurance and title. Tell your insurer, and ask about title insurance. See our title insurance guide.
Land Transfer Tax on a Buy-Out
A buy-out is a transfer of an interest in land, and land transfer tax is calculated on the value of the consideration. Ontario.ca says that includes the money paid, any liability assumed and any benefit conferred. For a partial interest in land that is subject to a mortgage, the province says the consideration includes the transferee’s share of the mortgage principal and accrued interest still owing, plus any other consideration given. In Toronto, the municipal land transfer tax also applies. See Ontario.ca, calculating land transfer tax and the land transfer tax FAQ, and our land transfer tax guide.
If the co-owners are spouses or former spouses, Ontario’s exemption is narrow: it applies only if the sole consideration is assuming a registered encumbrance, or the transfer follows a written separation agreement or a court order. Paying the other spouse for their interest takes the transfer outside the debt-only exemption. See Ontario.ca, transfers of land between spouses. Speak with a lawyer before you assume the tax is nil.
If the Co-Owners Are Spouses
Both spouses have an equal right to possession of a matrimonial home, whoever is on title (Family Law Act, section 19). A buy-out on separation also interacts with how property is divided between spouses, so involve a family lawyer as well as a real estate lawyer. See the Family Law Act on Ontario.ca.
If the Other Owner Will Not Agree
The Partition Act says joint tenants, tenants in common and others with an interest in land may be compelled to make or suffer partition or sale (section 2). Any person interested in the land can bring an action or make an application for partition, or for a sale under the court’s directions if the court considers a sale more advantageous (section 3). The Act does not give one co-owner a right to buy out the other. See the Partition Act on Ontario.ca and our article on partition and sale.
Protect Yourself
- Put every term in writing, signed by both owners. A handshake deal is hard to prove.
- Get independent legal advice before you sign, especially if one owner is paying out the other.
- Tell the lender and get its position in writing before you agree on a closing date.
- If you buy a property with someone else, consider a co-ownership agreement that sets out how a buy-out works before a dispute starts.
Frequently Asked Questions
Can I force my co-owner to sell me their share?
No. The Partition Act provides for partition or a court-ordered sale and does not give one co-owner a right to buy out another. A buy-out normally needs the other owner’s agreement.
How is the price set?
By agreement between the owners. An independent appraisal is a common starting point, and a co-ownership agreement may set a method in advance.
Do I pay land transfer tax on a buy-out?
Land transfer tax is calculated on the value of the consideration, which includes money paid and liabilities assumed, and for a partial interest subject to a mortgage it includes the transferee’s share of the mortgage balance. In Toronto the municipal tax also applies. Ask your lawyer to calculate it.
What happens to the mortgage?
The existing mortgage has to be dealt with, usually through the lender, which may require a new mortgage or a refinance. Speak to the lender before you agree on the terms.
Can I buy out a co-owner who is a joint tenant?
Yes, if they agree. The leaving owner transfers their interest, and the buying owner becomes the sole owner.
What if we cannot agree?
Any person interested in the land can apply to court under the Partition Act, and the court can order a sale if it considers that more advantageous. See our article on partition and sale.
Related: our real estate litigation service, our title transfer service and our resources hub.
Talk to a real estate lawyer about your property. Call (647) 696-8069 or book a free consultation. We serve clients in English, Hindi and Punjabi.
Legal Information, Not Legal Advice. This article is general information about buying out a co-owner in Ontario, based on the Partition Act, the Family Law Act and Ontario.ca land transfer tax guidance checked on October 30, 2026. It is not advice on your situation, so speak with a real estate lawyer before you agree to a buy-out.
