- For applications on or after January 1, 2020, there is no tax on estates of $50,000 or less, and $15 per $1,000 (or part) of value above that.
- Joint property that passes automatically and RRSPs with a named beneficiary are left out of the value.
- A mortgage or lien on Ontario real estate can be deducted, but funeral costs, legal fees and credit card debts cannot.
- An Estate Information Return is required within 180 calendar days after the certificate is issued, even if the value is $0.
When you apply for probate in Ontario, you pay estate administration tax based on the value of the estate. Getting that value right is an important part of the application.
The tricky part is knowing what counts. Joint bank accounts, registered plans, mortgaged houses and vehicles are treated differently from one another. This article walks through the categories so you can see where your estate's assets are likely to fall, though a lawyer should confirm the treatment of anything unusual.
How the tax is calculated
For applications on or after January 1, 2020, there is no estate administration tax on estates valued at $50,000 or less. For estates over $50,000, the tax is $15 for every $1,000 (or part of $1,000) of estate value.
The value is rounded up to the nearest thousand. The tax is paid when you apply, by cheque payable to the Minister of Finance.
What counts toward the value
- Ontario real estate, less encumbrances.
- Bank accounts, including foreign accounts.
- Investments.
- RRSPs, RRIFs and TFSAs with no named beneficiary.
- Vehicles and vessels wherever located.
- Property of the deceased held in another person's name.
The last item surprises people. If an asset was really the deceased's but sits in someone else's name, it can still count. If that describes your situation, ask a lawyer how it should be reported.
What is left out
- Real estate outside Ontario.
- Registered plan and TFSA assets (RPP, RRSP, RRIF, TFSA) that have a beneficiary designation.
- Jointly owned assets that pass automatically to the other owner or owners.
- The CPP death benefit.
These exclusions explain why two estates with the same net worth can pay very different amounts of tax. An estate where most wealth sits in joint accounts and designated plans may have a small probate value.
| Asset | Counted? |
|---|---|
| Ontario house (before mortgage) | Yes, less encumbrances |
| Joint account passing to survivor | No |
| RRSP with named beneficiary | No |
| RRSP or TFSA with no beneficiary | Yes |
| Car or boat, anywhere | Yes |
| Property in another country | Real estate outside Ontario: no; foreign bank accounts: yes |
| CPP death benefit | No |
Mortgages and other debts
An encumbrance such as a mortgage, collateral mortgage or lien can be deducted from the value of real property that is an estate asset. Other debts cannot be deducted. That includes funeral expenses, lawyer's fees and credit card debts.
So an Ontario home worth a certain amount with a mortgage registered against it is counted at its value less the mortgage, while a large credit card balance does not reduce the estate's value for this purpose.
Filing the Estate Information Return
An Estate Information Return must be filed with the Ministry of Finance within 180 calendar days after the certificate is issued, even if the estate value is $0. An Estate Information Return is also still required for estates of $50,000 or less.
Failing to file, or making false statements, can bring a fine of at least $1,000 and up to twice the tax payable, and/or imprisonment of up to two years. Accurate valuation matters for that reason.
What to do next
- List every asset and mark who owns it, how it is held, and whether a beneficiary is named.
- Separate joint assets that pass automatically from assets in the deceased's sole name.
- Gather mortgage statements for any Ontario real estate.
- Include vehicles and vessels wherever they are located.
- Check whether anything of the deceased's is held in another person's name.
- Diarize the 180-day Estate Information Return deadline once the certificate issues.
If the estate is close to the $50,000 line, or if it has foreign assets or unusual ownership, have a lawyer review the valuation before you file.
Frequently asked questions
Is a joint bank account counted?
Jointly owned assets that pass automatically to the other owner or owners are excluded from the value. Property of the deceased held in another person's name can still be included, so how the account was actually held matters.
Do RRSPs count toward the estate value?
RRSPs, RRIFs and TFSAs with no named beneficiary are included, while those with a beneficiary designation are excluded. Income tax on an RRSP is a separate matter from estate administration tax.
Can I subtract funeral costs and debts?
Not for this tax. A mortgage, collateral mortgage or lien on real property can be deducted, but funeral expenses, lawyer's fees and credit card debts cannot.
Do I still file anything if the estate is worth $50,000 or less?
Yes. No tax is payable on estates of $50,000 or less, but an Estate Information Return is still required. It must be filed within 180 calendar days after the certificate is issued, even if the value is $0.
Sources
- Ontario – Estate Administration Tax — ontario.ca
- Ontario – Apply for probate of an 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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