- For certificates applied for on or after January 1, 2020, no Estate Administration Tax is payable on an estate worth $50,000 or less.
- The estate must still file an Estate Information Return after the certificate is issued, even with no tax owing.
- No tax is owed at all if no estate certificate is applied for or issued.
If the person who died left a modest estate, you may be wondering whether Ontario's probate tax applies at all. For many small estates the answer is no tax, but that does not always mean no paperwork.
This article explains the $50,000 threshold, how the estate's value is worked out, and what you still have to file. A lawyer or accountant can confirm how it applies to your particular estate.
The $50,000 rule in plain terms
Estate Administration Tax, often called probate tax, is charged only when an estate certificate is applied for and issued. If no certificate is applied for or issued, no tax is owed.
For estate certificates applied for on or after January 1, 2020, no tax is payable on an estate worth $50,000 or less. Above $50,000, the tax is $15 for every $1,000 (or part thereof) of the estate's value over $50,000. The value is rounded up to the nearest thousand dollars when calculating.
Older applications were different. Before January 1, 2020, the rates were $5 per $1,000 (or part thereof) on the first $50,000 and $15 per $1,000 on the amount above, and estates of $1,000 or less were exempt. If you read older material, keep that change in mind.
What counts toward the $50,000
The estate's value is not simply what was in the bank. It includes Ontario real estate at its appraised value on the date of death, less encumbrances such as mortgages or liens. It also includes bank accounts, investments, vehicles, business interests and other property wherever situated. Assets are valued at fair market value at the time of death.
Some things are left out. This often brings an estate under the threshold.
- Insurance paid to a named beneficiary.
- Jointly owned assets that pass automatically to the surviving owner.
- RPPs, RRSPs, RRIFs and TFSAs with a beneficiary designation or declaration.
- Real estate outside Ontario, CPP death benefits, and RDSPs where the deceased was a subscriber but not a beneficiary.
On the other side, RRSPs, RRIFs and TFSAs whose beneficiary is the estate are included, and so is insurance payable to the estate. A share held as a tenant in common also counts, because it becomes part of the estate rather than passing to the other owners.
Debts and expenses do not lower the value
A common surprise is that debts usually do not reduce the estate's value. Only encumbrances on real property can be deducted. Funeral expenses, lawyer's fees, loans and interest, vehicle debt, credit card debt, real estate commissions, unregistered loans and lines of credit do not reduce it. A mortgage, collateral mortgage or lien registered against real property in the estate can be deducted from that property's value.
You must be able to support your values with documents such as statements or an appraiser's opinion of value. Real property is valued at its appraised value at the date of death, even if it later sells for more or less.
Forms and filings that still apply
Even when the estate is worth $50,000 or less and no tax is owed, the estate must still file an Estate Information Return after the certificate is issued. It is due to the Ministry of Finance within 180 calendar days after the certificate is issued. Online filing is recommended.
The probate application itself uses Form 74A, which asks for the total value of real property, the total value of personal property and the total estate value. If the estate is valued at $150,000 or less, the small estate application may apply instead, and its return is also due within 180 calendar days.
| Item | Estate of $50,000 or less |
|---|---|
| Estate Administration Tax | None payable |
| Estate Information Return | Still required |
| Return deadline | 180 calendar days after certificate |
| Supporting records | Keep for four years |
What to do next
- Make a list of assets and mark which ones pass outside the estate.
- Get statements or appraisals showing values at the date of death.
- Note any registered mortgages on real property.
- Confirm whether you need a certificate at all, since without one no tax is owed.
- Calendar the return deadline from the date the certificate is issued.
If you are close to the $50,000 line, or the value of an asset is uncertain, a lawyer or accountant can help you confirm the numbers before you file.
Frequently asked questions
Is any tax payable if the estate is exactly $50,000?
No. For certificates applied for on or after January 1, 2020, no tax is payable on an estate worth $50,000 or less.
Do I still need to file anything if there is no tax?
Yes. The estate must still file an Estate Information Return after the certificate is issued. It is due within 180 calendar days.
Can I subtract funeral costs and debts to get under $50,000?
Generally not. Funeral expenses, credit card debt and similar items do not reduce the value, though a registered mortgage on real property can be deducted.
What if the tax is later found to be owing?
Additional tax can be paid to the Superior Court of Justice or the Ministry of Finance, with an affidavit setting out the revised value of the estate at death.
Sources
- Ontario.ca – Estate Administration Tax — ontario.ca
- Ontario.ca – Co-ownership arrangements — ontario.ca
- Ontario.ca – Apply for probate of an estate — ontario.ca
- Ontario.ca – Probate of a small estate — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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