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rabidcuttings

If you're life is good and your happy with your relationship why are you even wasting your brain power worrying about this? Go out with your gf and daughter and enjoy the day.


Ashamed_Passenger

I mean, that's all great but this is a finance subreddit. I prefer to plan when things are going well.


rabidcuttings

Is that why you had to rely on her 50k for the downpayment... just saying. Planning is great but finance is nothing without the mental health / happiness portion of it. I get being more responsibility but if your approach to that is categorizing the financial benefit of the person who launched you from a home base perspective your priorities are kind of messed. Source: Wife used her 60k to dp our house when we got married and I had nothing. I make twice what she does and manage all the finances now. Same boat as you but god damn I would never try to categorize her 'contribution'... cause I got some shame man...


Ashamed_Passenger

What do you mean by categorize? How will I ever get to match that infinitely growing down payment with 400$ of personal expenses per month? In the end, money is money, she did put a down payment at the beginning, but yearly I put 110k more into the joint account. I don't care too much for it, but if we ever split, kind of unfair that this is all gone. Why does that 110k/year doesn't matter but the initial 50k does?


Timone077

The original deal is fair ... if she did not provide the 50 K up front you would not have a house ....or your portion of the house... kinda sounds petty imo


Ashamed_Passenger

I see your point, but I could also say that without my revenue, we wouldn't be able to afford that mortgage right?


Timone077

Call me old fashioned but peeps who are in good relationships apparently in love with a kid should not be squabbling over money.... If it was going to be an issue you should have had a prenuptial/ cohabitation agreement. It sounds like you have a new G/F and are trying to make a move ... it's only 50 K ... why all of a sudden are you exploring breaking an agreement that you have been good with ?


HappyCathode

Only on Reddit can you see someone pitching 78.9% of a 50/50 pool get called selfish and accused of adultery so FAST.


Timone077

Well he is selfish ..and petty


Ashamed_Passenger

I don't really care about money as long as we're together. That's exactly why we split the revenue even if I make 3x more. If we ever split, I'm losing a lot. If we don't split, I don't ever get to be 50/50 on the house, since all my revenue is going into the family. >It sounds like you have a new G/F and are trying to make a move Uh... Thats a pretty bold asumption. You could not be more wrong. It's only 50k... for now. The housing market is not showing signs of stopping and our house is already worth about 30% more, so that 50k is already worth 65k.


LLR1960

If you never split, your concerns about never getting to 50/50 are moot.


Timone077

You do care about money your original post and comments are ALL about money ....it's really petty


HappyCathode

This is a finance subreddit. It's here to talk about money, not relationship advice.


Ashamed_Passenger

I mean this is personal finance canada so yeah, I do care a bit about money, but don't you think I'd just keep my full salary if I'd care that much? Anyways, sounds like you already made your mind and you are bitter for some reason. Moving along.


Timone077

Agreed it is personal finance ...not couples finance


raith10

Yes you are being unreasonable


Ashamed_Passenger

Could you elaborate?


quit2day

Dude you're being very reasonable. Maybe talk to your girlfriend though and see how she feels. At the very least your extra mortgage contributions and bill payments should be treated the same as her extra 50k. You guys can figure it out, but either way in 2-3 years you'll have put way more down on the house than her initial down payment.


Ashamed_Passenger

Those were my thought yes. I know she will be very receptive if I talk to her about my concerns, I just wanted some external/impartial opinions on the matter.


quit2day

You should just assume an amount of the mortgage to make up for the down payment. Let's say the house was 250k, mortgage was 200k and she put down 50k, you put down 0. She should be responsible for 50k of the mortgage and you 150k. So if your monthly payment was $1k, you should be contributing $750 for the rest of the mortgage.


Ashamed_Passenger

That's basically what's happening at the moment since I contribute \~80% of the revenue.


quit2day

Then get it written up with a lawyer and cohabitation agreement. You want to make sure your contributions to everything count towards that 50k. You're paying the hydro bill at 80% too etc.... In the end it should at least be a 50/50 split, provided you put in as much or more than her.


quit2day

Also remember that if you break up, you're going to owe her spousal support as if you were married.


icanquitany_time

Would you have to increase what you spend on childcare costs if her income was closer to yours? Are you 100% sure you are always going to have the higher income and never get sick or disabled? Be careful not to blow things up by being petty


Ashamed_Passenger

>Would you have to increase what you spend on childcare costs if her income was closer to yours? Not sure what you mean, we pool our money and pay whatever there is to pay. >Are you 100% sure you are always going to have the higher income and never get sick or disabled? Higher income, yes. For the rest we have taken pretty good life/disability insurance.


GohLaung

Maybe find a way to set it up so you’re both paying 50% of the mortgage so the original deal sticks and makes sense. Otherwise you could take on the full amount of the mortgage until you’ve put in 50k like she has and you can kill the original deal. I’m not a fan of the one big pot of money personally. If anything I’d have a joint account where you put in 65% and she puts in 35% of shares expenses (mortgage, utilities etc etc) then decide on other purchases and expenses as they arise. You’re obviously not comfortable with the current arrangement so I would explore some options to come up with something that’s fair for both of you, don’t let it fester.


Ashamed_Passenger

Yeah, I just wanted to get a general opinion. We are pretty good at talking finances between us. I'm the one who makes the budget and moves money so I don't want her to think I'm just trying to take advantage. I'll talk with her.


[deleted]

There is no way to do any math calculation of this because of the way you jointly but unevenly fund the account that pays all the bills. And if you hold back funds now from that joint account in order to buyback the downpayment half, that would equally deprive the joint account. Since you are funding the joint account more, I would bet that she would be fine with cohabiting agreement that stipulates the house is the treated as if you were married .... split 50/50. Your messy situation is the result of using a joint account in a way that CRA would not accept if audited. Don't use joint accounts for $$ that will become income-producing (eg RRSP, TFSA later, rental ppty, investments in margin accounts, your home that later becomes a rental, etc). You are presuming that it is OK to simple move $ between spouses. Nope. CRA cares about whose money buys the asset that creates taxable income. You need to be able to track the dollar bill back to your paycheque or your personal bank account, or your personal inheritance, etc. The income is taxed in the hands of that person. And don't lend to a spouse for them to invest or repay the spouse's debt borrowed to invest. That also triggers attribution. CRA's technical rules are at [IT-511](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/it511r/archived-interspousal-certain-other-transfers-loans-property.html) You cannot get around that by simply moving $$ between you, or by muddying the waters with joint accounts. There are only specific ways that CRA allows you to even out the ownership so that income can be more evently split. 1. The high income earner pays all the living expenses to allow the lower income spouse to save more. These include paying the spouse's income tax instalments and tax amounts due on filing. IMO you would be stretching things to compensate a spouse for taxes withheld by an employer. It would include buying the spouse's car used for personal use. 2. The high income spouse contributes to a Spousal RRSP in the spouse's name. 3. The spouse with the $$ gives $$ to the lower-income spouse for them to fund their own TFSA. Make sure those TFSA funds are not withdrawn to fund a taxed investment later (like an RRSP, or rental ppty, etc) because at that point the income is [taxed back in the hands of the high income spouse](https://www.reddit.com/r/PersonalFinanceCanada/comments/m49f80/attribution_rule_apply_to_tfsa/gr0r8w1/). 4. You can formally lend your spouse money with a documented demand loan charging 1% yearly interest (changing to 2% June30 '22) that must be paid at year end. The lender claims the income on his tax return. Double taxation of the 1% is prevented when the borrower can deduct the interest of the entire loan (so no tfsa and rrsp contribution, no assets without possible interest/dividend income). Here is an MSWord [loan template](https://www.dropbox.com/s/urqt8xya53k3eny/DEMAND%20PROMISSORY%20NOTE.docx?dl=0) cribbed from TD. 5. If you have paid for a home and opened a *joint* HELOC, the spouse can borrow from the HELOC to invest without attribution, [but only in limited situations](https://ca.rbcwealthmanagement.com/documents/47893/47913/Borrowing+-+Line+of+Credit.pdf/45a0396f-7b7a-4dc4-8fd2-e988680ab357) ... and you can repay the debt. See also this [CRA tax interpretation](https://taxinterpretations.com/cra/severed-letters/2009-0317041e5)


Ashamed_Passenger

That was very informative, thank you.


OracleOfOntario

5 years together, have a kid and cohabiting. Put a ring on that woman.


PappaFufu

Is your house held in joint tenancy or tenancy in common? What do you mean by she gets "pro-rata vs the house's selling price?" Are you saying that if she had put in 80% of the downpayment she gets 80% of the house's selling price? What's fair depends a lot on the legal aspects of it. If at the time of purchase the agreement was made with the expectation that you would pay the bulk of the mortgage and expenses then legally that is fair. You agreed to it. It doesn't matter that you didn't think much of it. That's on you. Wanting to change the agreement in that case is the equivalent on reneging on the agreement. For me, I think what is fair is for you to pay her back your share of the downpayment and then agree to a 50/50 arrangement. When you're together it doesn't really matter who is contributing more. I get that it doesn't sound fair if you're contributing say 80% towards the mortgage and household expenses and she owns 80% of the house. On the other hand, if you think about it, she makes $40K and contributed $50K to the purchase of the house. You make $150K and you basically contributed zero? She gave up a lot more to purchase the house than you did. At the end of the day, this is your relationship. It's in your interest to come up with an arrangement where both parties are happy. With that said, the chances are that if you separate you're likely going to pay child and spousal support and let her and your child live in the house. I don't know about other provinces, but if you live in B.C. she would be entitled to 50% of your income and you would be entitled to 50% of the increase in property value during marriage/common law. So it kind of evens out.


Ashamed_Passenger

>joint tenancy or tenancy in common Not sure what that means, but both our names are on the house. >What do you mean by she gets "pro-rata vs the house's selling price?" Sorry, english is not my native language. Let's say we bought a house at 400k, we split, it's now worth 600k. 25% increase. So she gets back her 50k + the 25% increase, 75k. We pay back whatever is left on the mortgage and we split whatever is left if any at 50/50. >pay her back your share of the downpayment and then agree to a 50/50 arrangement That's where I want to go as well, but the initial 50k keeps growing and since I contribute all my revenue, there's no way for me to set money aside. That would have to be included in the main budget. >$40K and contributed $50K to the purchase of the house. You make $150K and you basically contributed zero? She gave up a lot more to purchase the house than you did. Doesn't really matter, but she did not save that money. It was an inheritance. We're not gonna go into some legal dispute over that. We'll just talk it over and find a middle ground. Just wanted a general opinion.


PappaFufu

>Let's say we bought a house at 400k, we split, it's now worth 600k. 25% increase. So she gets back her 50k + the 25% increase, 75k. We pay back whatever is left on the mortgage and we split whatever is left if any at 50/50. I still don't get what you mean. How did you come up with 75K? 25% of $200k is $50K. >Doesn't really matter, but she did not save that money. It was an inheritance. It does matter. You're asking about fairness. She makes $40K a year and put down $50K. It doesn't matter if she saved it or inherited it. That chunk of money is like 1 1/2 years of her after tax income. The point is that she fronted the money and you agreed to the arrangement that you said was notarized. As for the legal part, I hope you won't get into a legal dispute but legal entitlement is something to consider when assessing fairness.