Do You Need Probate to Sell a House After Death in Ontario?

If someone died owning a house, the person named to handle the estate often wants to sell quickly. Buyers, lawyers and the land registry will want proof that you have the legal authority to do so.

This article explains when a certificate of appointment of estate trustee (commonly called probate) is generally needed to sell or transfer a house in Ontario, the narrow exceptions, and the costs and tax points to think about first.

Why authority matters

Ontario says an estate trustee is the only person with legal authority to manage or distribute an estate. The job includes paying taxes, bills and debts, collecting assets and distributing the residue to those entitled. A family member living in the house, or a beneficiary named in a will, does not automatically have that authority.

Ontario also says an estate normally must be probated if the deceased owned real property. For a house owned in the deceased's name alone, that usually means obtaining the certificate before selling.

What the land registry expects

Ontario Regulation 4/16 (Electronic Registration) lists the certificate of appointment, or an order confirming the appointment, of the applicant as estate trustee as an item required in an estate registration.

A transfer by an estate trustee, executor or administrator must include a statement that the transferor is entitled to transfer the land. It must also state whether title is subject to spousal rights under the Family Law Act, and whether the consent of all required parties was obtained.

A registrar may waive the certificate only in narrow circumstances. The property must be a Ministry conversion from Registry to Land Titles, and the transaction must be the first dealing after conversion. An affidavit and a covenant to indemnify the Land Titles Assurance Fund are also required. Do not count on this exception without legal advice.

When the house may not need probate

If the house was jointly owned with a right of survivorship, it passes to the other owner and does not fall into the estate. Ontario's listed probate case concerns real property that does not pass to another person by right of survivorship, and jointly owned assets that automatically become the other owner's are excluded from Estate Administration Tax. The survivor then updates title, as we explain in our article on removing a deceased joint owner from title.

If the owners were tenants in common, the deceased's share becomes part of the estate, and an estate trustee is the only person with legal authority to manage or distribute an estate.

There is also a small estate certificate for estates valued at $150,000 or less, using Forms 74.1A and 74.1B. Whether it works for a particular house and sale depends on the estate and what a buyer's lawyer will accept, so confirm before relying on it.

Costs and tax to plan for

For certificates applied for on or after January 1, 2020, Estate Administration Tax is $15 for every $1,000 (or part thereof) of estate value over $50,000, and no tax is owed if the estate is $50,000 or less. Verify the current rate before applying. Real estate is valued at its appraised value on the date of death, less encumbrances such as a mortgage or lien, while credit cards and lines of credit cannot be deducted.

An Estate Information Return must be filed within 180 calendar days of receiving the certificate, listing the value of the deceased's assets at death.

Income tax is separate. A deceased taxpayer is treated as having sold each capital property immediately before death at fair market value. The principal residence designation applies only until the date of death, and the legal representative must still designate it on the final return using Schedule 3 and Form T1255. If the estate later sells, the gain is generally the sale price minus the fair market value reported on the final return, plus disposition costs, reported on the T3. Talk to an accountant before listing.

What to do next

• Confirm how title was held and whether any owner survives by right of survivorship.
• Find out if there is a will and who is named as estate trustee.
• Get the appraised value as of the date of death and the mortgage balance.
• Decide with a lawyer whether to apply for a certificate of appointment or a small estate certificate.
• Do not distribute property in kind without advice, since property divided to beneficiaries without a court order can stay subject to the deceased's debts for three years.
• Ask an accountant about the final return and any T3 filing.

Paying the estate's debts is one of an estate trustee's fundamental duties, so keep clear records of everything you do.

Frequently asked questions