Estate Administration Tax in Ontario: How It's Calculated

When an executor applies to the court for a Certificate of Appointment of Estate Trustee — what most people still call "probate" — Ontario requires payment of a provincial tax called the Estate Administration Tax (EAT). For many estates, EAT is the single largest cost of the probate process. Understanding how it is calculated, what is included in the taxable estate value, and what planning options exist can make a meaningful difference to the net amount beneficiaries receive.

This article explains the EAT framework in general terms.

What Is the Estate Administration Tax?

EAT is a provincial tax governed by Ontario's Estate Administration Tax Act. It is payable by the estate (not the executor personally) when a Certificate of Appointment of Estate Trustee is filed in the Superior Court of Justice. No certificate is issued until the tax is paid or a deferral arrangement is made.

EAT is sometimes loosely called "probate fees" — that term predates the current statute but still appears in common usage. Both phrases refer to the same charge.

How EAT Is Calculated

EAT is calculated based on the value of the estate assets at the date of death, less any mortgage or other encumbrance on real property. Ontario uses a tiered structure:

• First tier: Estates valued at $50,000 or less pay no tax.
• Second tier: Estate value above $50,000 is taxed at $15 for each $1,000 or part of $1,000.

Because the first $50,000 is exempt, the structure gives smaller estates a lower effective rate. The rate and the $50,000 exemption are set in the Estate Administration Tax Act itself.

Example of the calculation logic:

If an estate is valued at $800,000 and the first-tier threshold is $50,000, only the amount above the threshold is taxed at the full rate. The arithmetic is straightforward once you know the current figures; the judgment lies in correctly identifying what belongs in the estate value.

What Is Included in the Estate Value?

The estate value for EAT purposes is the total value of all estate assets — that is, assets that form part of the deceased's estate and pass through the will (or through intestacy). Common inclusions:

• Real property located in Ontario registered in the deceased's name alone, or as a tenant-in-common (valued at the deceased's proportionate share).
• Bank and investment accounts held in the deceased's name alone.
• Personal property: vehicles, jewellery, artwork, household contents, collectibles.
• Business interests held in the estate (shares, partnership interests, depending on structure).
• Amounts owing to the deceased (receivables, loans made by the deceased).

What is generally excluded from estate value:

• Assets that pass by right of survivorship to a joint owner (e.g., a jointly held bank account or jointly owned home passes directly to the surviving joint owner and does not form part of the estate).
• Registered accounts (RRSPs, TFSAs, RRIFs) with a named beneficiary other than the estate — these pass directly to the named beneficiary.
• Life insurance proceeds with a named beneficiary other than the estate.
• Assets held in a trust during the deceased's lifetime (inter vivos trust).
• Real property located outside Ontario (though it may attract probate-equivalent taxes in the jurisdiction where it is located).

This distinction — between estate assets and assets that pass outside the estate — is central to both the EAT calculation and to estate planning strategies aimed at reducing EAT exposure.

The Sworn Statement of Assets

When filing the probate application, the executor must swear a Statement of Assets declaring the estate's value as of the date of death. This is a legally binding document. Understating estate value — whether by error or omission — can expose the executor to penalties and personal liability.

If the executor later discovers an asset that was not included (which happens — not all assets are immediately apparent), an amended statement and additional EAT must be filed.

EAT and Estate Planning: The Relationship

Because EAT applies only to assets that flow through the estate, some people take steps during their lifetime to reduce the probated estate:

• Naming beneficiaries on registered accounts (RRSPs, TFSAs, RRIFs) and life insurance policies.
• Holding property jointly with a right of survivorship so it passes directly to the co-owner.
• Using an inter vivos (living) trust to hold assets outside the estate.

These strategies can reduce EAT materially in larger estates. However, each has its own legal and tax implications — for example, adding a child as a joint owner of real property can trigger land transfer tax and income tax consequences. Planning to minimize EAT should always be reviewed holistically with a lawyer and, where appropriate, an accountant.

A secondary will is also used by some testators to segregate assets that do not require probate (such as shares of a private corporation) from assets that do. This keeps the probated estate value lower and reduces EAT accordingly. Whether a secondary will is appropriate depends on the estate's composition.

Frequently asked questions