Do Probate Fees Apply to a House With a Mortgage in BC?

If someone has died owning a home with a mortgage still on it, one of the first worries is often the probate fee. It is natural to assume the fee is charged only on what is left after the mortgage is paid. That assumption needs checking before you budget.

This article explains how the British Columbia probate fee is calculated, why a mortgage does not usually reduce the value used, and when a house may fall outside the fee altogether. Your facts will matter, so a lawyer can confirm how this applies to your estate.

This article covers the law of British Columbia.

How the probate fee is calculated

The probate fee is set by the Probate Fee Act. It is in addition to the court fees to start the proceeding and file documents.

No probate fee is payable if the value of the estate does not exceed $25 000. Above that, the fee is $6 for every $1 000 (or part of $1 000) between $25 000 and $50 000, plus $14 for every $1 000 (or part of $1 000) above $50 000.

As an example, an estate valued at $500,000 owes a probate fee of $6,450. On a $1,000,000 estate the fee is $13,450, and with the $200 court filing fee the total is $13,650.

Why a mortgage does not usually lower the value

The Act defines the value of the estate as its gross value, as stated in a Statement of Assets, Liabilities and Distribution that is exhibited to the affidavit leading to the grant. The definition contains no deduction for debts or mortgages.

In plain terms, a house with a mortgage on it is generally reported at its gross value rather than at the smaller amount left after the debt is paid. The mortgage still matters as a debt of the estate, but how it is handled depends on your situation, so it is worth confirming with a lawyer.

The probate fee must be paid to the government before the grant issues. The registrar issues the grant once all fees payable, including the applicable probate fees, have been paid. The Lieutenant Governor in Council may also make regulations defining 'gross value' and 'situated in British Columbia' for the Act.

The statute does not say how real property should be valued for the Statement. If the value is unclear, confirm the approach with a lawyer or the court registry before you swear the affidavit.

When the house may not count at all

The fee applies only to property that passes to the personal representative. Assets that pass directly to someone else at death, such as by right of survivorship, are outside the definition. Land devolves to the personal representative unless there is a right to land by survivorship.

• Joint tenants with survivorship: the home generally passes to the surviving owner rather than through the estate.
• Tenants in common: a joint holding without survivorship passes to the personal representative.
• Simultaneous deaths or no proof of who survived: each owner is deemed to have held the property as a tenant in common, so a share can pass through the estate.
• Home outside British Columbia: real property in another province or country is outside the fee base.

Whether a joint owner holds the home for their own benefit is sometimes a question for a court, so do not assume the answer from the title alone.

Quick comparison

What to do next

• Get the title search or ownership documents to see how the home was held.
• Collect the current mortgage statement so you know the debt and who will carry it.
• List every other asset and check whether it passes to the estate or directly to someone else.
• Work out a supportable value for the home to report in the Statement of Assets, Liabilities and Distribution.
• If you later find an asset you missed or a wrong value, you must disclose it and pay any extra fee.

If the numbers are large or ownership is unclear, a lawyer can review the Statement before it is filed.

Frequently asked questions