Under the Family Law Act, a spouse can deduct debts and other liabilities that were owed as of the valuation date, as well as the value of property owned on the date of marriage from their net family property for equalization purposes. However, there are exceptions to this rule. For instance, the value of the matrimonial home at the date of marriage cannot be deducted, and debts or liabilities related directly to the acquisition or significant improvement of the matrimonial home cannot be deducted. It's important to note that for these exceptions to apply, the home occupied as the family residence on separation must be the same as the home owned on the date of marriage.

Equalization deductions come into play when a marriage ends, either through divorce or separation. As per Section 4(1) of the Family Law Act, a spouse can deduct debts and other liabilities, along with the value of property they owned on the date of marriage from their net family property for the purposes of equalization. However, the onus of proving a deduction lies on the spouse claiming the deduction. Hence, it is crucial for a spouse to maintain detailed records of their financial position on the date of marriage to substantiate their claim.

A key component of this is understanding the concept of 'excluded property'. Excluded property refers to certain types of property that are not included in the net family property calculation, which is the method used to divide property between spouses during a divorce or separation.

Upon the breakdown of a marriage, an important aspect to consider is the division of property. In many jurisdictions, the goal is to equalize the value of the property acquired during the marriage. However, what is often overlooked are the exceptions to what is included in calculating net family property, also known as exclusions. These exclusions play a significant role in determining the final net family property figure and can greatly influence the division of assets.