Ontario Divorce Lawyer Miao He: Does Property in China Have to Be Included? What If It Was Purchased Before Marriage and Has Fallen in Value?

Questions Clients Commonly Ask

“The property is in China. Does a Canadian court have jurisdiction over it?”

“I bought that property in China entirely before I got married, and it is registered in my name alone. Does it still have to be included?”

“Property prices in China have fallen significantly in recent years, and the property is difficult to sell. Will the Ontario court recognize the decrease in value?”

1. Ontario Calculates Global Assets

The geographic scope of a property division is determined by the applicable law, not simply by where the property is physically located.

Under s. 15 of the Family Law Act, when a marriage breaks down, property rights are governed by the law of the spouses’ last common habitual residence. If that residence was in Ontario, Ontario’s equalization regime applies to the parties’ property as a whole, regardless of where the assets are located.

A Form 13.1 Financial Statement requires disclosure of assets located in China, including real estate, bank and investment accounts, corporate interests and nominee or held-on-behalf arrangements, housing or other funds, and other foreign accounts and assets.

Failing to disclose an asset is not a strategy.

Under s. 56(4), a court may set aside an agreement in certain circumstances where there has not been adequate disclosure. Non-disclosure can also affect costs and the court’s assessment of a party’s credibility.

But Calculation and Enforcement Are Different Issues

There is an important distinction between including an asset in the Ontario calculation and enforcing an order against the asset itself.

An Ontario court can take the value of property in China into account when calculating NFP and can make a payment order against the party before the court.

However, an Ontario court does not generally have jurisdiction over land located in China and would not ordinarily make an order directly requiring the sale or possession of Chinese real estate.

In practice, the value of the Chinese property may be included in the equalization calculation, while the resulting payment obligation is satisfied through Canadian assets or a monetary payment.

2. Property in China Is Not a Matrimonial Home — and That May Actually Help You

Section 28(1) provides that the provisions relating to matrimonial homes apply only to property located in Ontario.

The consequences go in two directions.

The disadvantage

A property in China does not receive the special protections applicable to a matrimonial home in Ontario.

For example, a spouse does not acquire the statutory right of possession under s. 19 merely because the property was used as the family home, and the special consent requirements under s. 21 do not apply in the same manner to property outside Ontario. An Ontario court would also not ordinarily make an exclusive-possession order concerning land located in China.

The often-overlooked advantage

Because the Chinese property is not a matrimonial home under Ontario law, the “other than a matrimonial home” limitation in s. 4(1) does not apply.

The property is therefore treated as ordinary property for NFP purposes.

If you purchased the property before marriage and owned it on the date of marriage, its value at the date of marriage may generally be deducted, regardless of how many times you or your spouse may have stayed there during the marriage.

This principle is consistent with the reasoning in Lau v. Tao, 2025 ONCA 819.

That case involved a property in Hong Kong. The parties lived there after their marriage, but the property was sold in 2018 before the parties moved to Ontario. They separated in 2019.

The Ontario Court of Appeal upheld the conclusion that the property was not a matrimonial home under s. 18(1) because it was not occupied as the spouses’ family residence at the time of separation, relying on Folga v. Folga (1986), 2 R.F.L. (3d) 358 (Ont. H.C.J.).

3. Why a Decline in the Value of a Pre-Marriage Property in China Can Reduce Your Equalization Payment

The basic NFP calculation can be summarized as:

Property at the Date of Separation − Property at the Date of Marriage = NFP

For property owned on the date of marriage, the relevant amount is its value at the date of marriage.

If the property is worth less at the date of separation, the difference can reduce the NFP.

Consider a simplified example:

	Date of Marriage	Date of Separation
Chinese property — CAD value	$800,000	$600,000

The property’s net contribution to NFP would be −$200,000.

It does not simply fail to increase your NFP. It can reduce the NFP generated by your other assets by $200,000.

Because equalization is based on one-half of the difference between the spouses’ NFPs, all other things being equal, this could potentially reduce the equalization payment by $100,000.

If the property is simply omitted from the calculation—neither included as an asset at the date of separation nor properly reflected as property owned on the date of marriage—the negative contribution disappears.

In effect, you may be giving up a deduction that could reduce your NFP and therefore increasing the amount you may have to pay to your spouse.

A Practical Observation

In cases handled by Miao He, pre-marriage property in China has sometimes been completely overlooked.

Clients may think that “not reporting it” is safer.

But if the property has declined in value between the date of marriage and the date of separation, leaving it out of the calculation can actually work against the owner by increasing the equalization obligation.

There are two important limits.

First, under s. 4(5), NFP cannot be less than zero. Depreciation can reduce NFP to zero, but it cannot create a negative NFP that requires the other spouse to pay money to the owner.

Second, this is simply the normal operation of the NFP calculation. It does not require an argument that the result would be “unconscionable.” The unequal-division provision under s. 5(6) is a separate issue and has a very high threshold, as illustrated by Serra v. Serra, 2009 ONCA 105, at para. 47.

4. Exchange Rates: The Easiest Part to Get Wrong

The value of the property on both relevant dates must ultimately be expressed in Canadian dollars for purposes of the NFP calculation.

Suppose a property was worth RMB 4 million on the date of marriage and RMB 3.8 million on the date of separation.

In RMB terms, the property declined by 5%.

But if the RMB appreciated by 15% against the Canadian dollar during the same period, the property could actually have increased in value when measured in Canadian dollars.

The reverse is also true. If the RMB-denominated value of the property remained unchanged but the RMB weakened against the Canadian dollar, the property’s value in Canadian dollars would have decreased.

The two issues therefore need to be analyzed separately:

• Changes in the property’s local-currency value should be supported by appropriate valuation evidence; and
• Changes in the exchange rate should be supported by the applicable exchange rates for the two relevant dates.

In practice, the Bank of Canada exchange rate for the relevant dates may be used, with the source and dates clearly identified in the supporting materials.

If this calculation is not clearly explained, it is often one of the first issues the opposing lawyer will challenge.

5. What Evidence Should You Prepare?

Under s. 4(3), the spouse claiming the deduction bears the burden of proving entitlement to it.

An Ontario court will not independently investigate the historical value of property in China. The necessary evidence must be provided by the party making the claim.

Ownership and Acquisition

Depending on the circumstances, relevant documents may include:

• Property ownership certificates;
• Purchase and sale agreements;
• Online property transaction records;
• Purchase invoices and tax receipts;
• Deed or transaction-tax documents;
• Records showing payment of the purchase price;
• Mortgage records and repayment records; and
• Bank records showing the source of the funds used to purchase the property.

Value at the Date of Marriage

Evidence may include:

• A formal appraisal prepared as of, or close to, the date of marriage;
• Historical comparable sales for similar units in the same development or neighbourhood;
• Historical transaction records for comparable properties; and
• Where the property was purchased shortly before marriage, the purchase agreement and purchase price may itself provide strong evidence of its value at the date of marriage.

Value at the Date of Separation

A formal valuation report from a qualified appraisal professional in China may be required to establish the property’s value as of the date of separation.

Translation and Authentication

Chinese-language documents may need to be accompanied by certified translations. Depending on the nature of the document and the circumstances of the case, notarization, authentication, or other formal verification may also be required.

These processes can take months.

In cross-border cases, one of the most common reasons a party encounters difficulty is not the underlying legal principle, but simply running out of time to obtain the necessary evidence.

Appraisals, document retrieval, authentication, and certified translation can be sequential processes. Document collection should therefore begin before the first financial disclosure is submitted, whenever possible.

6. Practical Takeaway

If you own property in China and the spouses’ last common habitual residence was in Ontario, the property generally needs to be disclosed and considered in the Ontario NFP calculation.

If the property was purchased before marriage, the key questions include:

1. Did you own the property on the date of marriage?
2. What was its value at the date of marriage?
3. What was its value at the date of separation?
4. Was the property located outside Ontario and therefore outside the statutory matrimonial-home regime?
5. Can you provide reliable evidence establishing both values?
6. Have you correctly converted both values into Canadian dollars?

If the property declined in value between the date of marriage and the date of separation, that decline may reduce your NFP and therefore reduce the equalization payment you may owe.

But the calculation must be done carefully.

The property’s RMB value, the CAD/RMB exchange rate, the date-of-marriage value, and the date-of-separation value are all separate pieces of the analysis.

And above all, do not omit the property simply because it is located in China or because its value has fallen.

Statutory and Case Authorities

• Family Law Act, R.S.O. 1990, c. F.3, ss. 4(1), 4(3), 4(5), 5(6), 15, 18(1), 19, 21, 24, 28(1), 56(4)
• Lau v. Tao, 2025 ONCA 819
• Folga v. Folga (1986), 2 R.F.L. (3d) 358 (Ont. H.C.J.), at 363
• Nahatchewitz v. Nahatchewitz, 1999 CanLII 787 (ON CA)
• Serra v. Serra, 2009 ONCA 105, 93 O.R. (3d) 161, at para. 47

This article provides general legal information only. It does not constitute legal advice for any particular case and does not create a solicitor-client relationship. Cross-border property cases are highly fact-specific, and the outcome may vary significantly depending on the facts and documentary evidence. Legislation and case law change; confirm the current authorities before relying on a citation.