Is Estate Administration Tax Based on the House's Value at Death or Its Sale Price in Ontario?

The tax is based on the home's appraised value on the date of death, not on the price it later sold for. Ontario real estate is valued at that appraised value, less encumbrances such as mortgages or liens.

This holds even if the house sells for more or less shortly after the death. Assets in general are valued at fair market value at the time of death. A mortgage, collateral mortgage or lien registered against the property can be deducted from its value, but funeral expenses, lawyer's fees, credit card debt and real estate commissions do not reduce the estate's value.

To establish the value, you need supporting documents, such as statements or an appraiser's opinion of value. The probate application, Form 74A, asks for the total value of real property, the total value of personal property and the total estate value. For applications on or after January 1, 2020, no tax is payable on an estate worth $50,000 or less, and above that the tax is $15 for every $1,000 (or part thereof) over $50,000. The estate pays the tax, not you personally. If the sale price differs sharply from the appraisal, a lawyer or accountant can confirm how to proceed.