If a house goes up in value, should spousal support be reduced or stopped altogether? iStock.
If a house goes up in value, should spousal support be reduced or stopped altogether if the person who receives support got the house in the settlement?
In a recent case where this question was posed, the court said: no way!
The ex-husband applied last year to have the support reduced or dropped because the value of the house his ex-wife received in the 2008 divorce settlement was $700,000 in 2008, but climbed to well over $1 million by 2015. He had received the RRSP’s valued at $130,000 in the settlement.
The ex-husband remarried in August 2010 and moved to Sweden with his new wife in 2011.
In the same year he moved to Sweden, the spousal support was reduced from $1900 to $842 per month.
In 2015, he wanted to have his spousal support reduced again or dropped altogether, because the house had gone up in value by almost $500,000.
Based on this new fact, he argued that his “financial circumstances have deteriorated significantly and the financial circumstances of the wife have improved beyond what anyone could have expected.”
However, in looking at whether to reduce support again, the court didn’t look at the home value increase but rather the income and circumstances of the ex-husband and wife. The court found that he currently made approximately $108,000, slightly down from the $114,000 in 2008, and the ex-wife earned approximately $44,000.
The court said there was no real change in the situation of the ex-husband or wife. Even if the house went up in value significantly, she’s still paying the mortgage, her living expenses haven’t decreased and she is not selling the house and therefore reaping the benefits of the higher house value.
The court also said at the time of the divorce settlement “the possibility that the value of the house could increase would have been known at the time”.
In other words: tough luck.