Probate and Real Estate in Ontario: What Happens to Property When Someone Dies

Ontario real estate is often the most valuable asset in an estate — and it's frequently the reason a family cannot avoid probate. Unlike a bank account, which might be released on an indemnity affidavit, Ontario's land registry has strict requirements about how property can be transferred when an owner has died. Understanding probate and real estate in Ontario is essential for any estate trustee dealing with a property.

This article explains when probate is required for estate property, how different ownership structures affect the outcome, and what the estate trustee needs to do to sell or transfer real estate after a death.

How Property Ownership Determines the Path Forward

The single most important factor is not the value of the property — it's how the title was registered at the time of death.

Joint Tenancy: Property Passes Automatically

When two or more people own property as joint tenants (the most common form of co-ownership between spouses), Ontario's law gives the surviving owner(s) an automatic right of survivorship. At the moment of death, the deceased's interest disappears and the surviving owner becomes the full owner by operation of law.

To update the land registry after a joint tenant dies, the surviving owner files:

• A certified copy of the death certificate, and
• An affidavit of survivorship confirming the ownership structure and the death.

No Certificate of Appointment is required. No probate. The property never enters the estate.

This is why joint tenancy is commonly used between spouses for the family home — it provides a clean, probate-free transfer to the survivor.

Tenancy in Common: Property Goes Through the Estate

When owners hold property as tenants in common, each owner has a distinct, undivided share that can be left by will or pass under intestacy rules. When a tenant in common dies, their share does not automatically go to the surviving co-owner(s) — it passes through the deceased's estate.

This means the estate trustee must obtain a Certificate of Appointment of Estate Trustee before they can deal with the deceased's share of the property. The land registry will require the certificate before registering any transfer or mortgage affecting the estate's share.

Property in the Deceased's Name Alone

Where the deceased was the sole registered owner, the property is entirely an estate asset. The estate trustee cannot sell it, transfer it, or even refinance it without the Certificate of Appointment. This is the most common reason families contact a probate lawyer.

What the Land Registry Requires

Ontario's land titles system (administered under the land registry framework) requires the Certificate of Appointment to be registered against the title before the estate trustee can transfer the property. In practice:

1. The estate trustee obtains the Certificate of Appointment.
2. A real estate lawyer registers the certificate (or a notice of it) against the title.
3. The estate trustee can then sign the deed to transfer or sell the property.

The certificate does not transfer the property by itself. It gives the estate trustee the legal authority to then execute the transfer or agreement of purchase and sale.

Selling Estate Property in Ontario

When the estate owns real estate that needs to be sold, the process typically looks like this:

Before probate: The estate trustee can list the property for sale, negotiate a purchase and sale agreement, and accept an offer — but they cannot close (transfer title) until they hold the Certificate of Appointment. This means savvy estate trustees often list property early to avoid delay, but they build appropriate closing terms into any agreement.

After probate: Once the certificate is in hand, the estate's real estate lawyer can close the transaction — registering the transfer in the land titles system.

Tax considerations: The sale of estate property may trigger capital gains tax. The cost base (adjusted cost base, or ACB) for inherited property is generally the fair market value at the date of death — meaning gains since death are taxed in the estate. The estate must file a T3 return if there is income, including capital gains. Verify current CRA rules with a tax professional.

The Family Home and the Principal Residence Exemption

In many estates, the deceased's home qualifies for the principal residence exemption, which can shelter some or all capital gains on the sale from tax. The rules governing the exemption — how many years the property qualifies, whether the executor can claim it, and how to report it — are complex and specific to each family's situation. Get tax advice before assuming the gain is fully sheltered.

When There Is a Mortgage on the Estate Property

If the deceased had a mortgage on the property, the mortgage obligation becomes a debt of the estate. The estate must continue to make mortgage payments during the estate administration period (while awaiting the certificate and closing any sale) or risk the lender calling the loan. The estate trustee has a duty to protect estate assets — including keeping the property insured and mortgage payments current.

Ancillary Issues: Tenants and Property Management

If the property has tenants, the estate trustee inherits the role of landlord and must comply with Ontario's Residential Tenancies Act for the duration of the estate administration. A sale of the property generally does not automatically end a tenancy — the buyer acquires the property subject to existing tenancies unless a proper termination process is followed. This adds complexity to estate real estate sales.

Frequently asked questions