Quitclaim Deed in Ontario: Does It Exist and What Replaces It?

You may have heard that someone "signed a quitclaim deed" to hand over their share of a house. That phrase is common in American real estate and in online forms. If you own property in Ontario, you probably want to know what the real equivalent is here and whether a form you found online would do anything.

This article explains, in general terms, how an interest in land is given up or moved in Ontario, who can register it, and what tax questions come up. Details turn on your facts, so a lawyer should confirm before you sign anything.

What a quitclaim deed is meant to do

In plain terms, a quitclaim deed is a document where a person gives up whatever interest they have in a property, without promising what that interest is. People use the idea when a name needs to come off a property, for example after a separation, a death or a family arrangement.

In Ontario, the goal is the same, but the document and process are different. A transfer is registered in the land registry system by an authorized user. The label "quitclaim" is not what makes it work. Registration is what changes the title.

How a transfer is actually registered

Only authorized Teraview account holders and their registered users can create and submit documents in Ontario's Electronic Land Registration System. Authorized groups include lawyers, conveyancers, surveyors, real estate agents, mortgage brokers and financial institutions, and registered users need a Personal Security Licence from Teranet. Land registry services are only available online.

After registration, entries are reviewed and certified by ServiceOntario, which updates the property title information. The public can search current and historical title records through OnLand for a fee. A form downloaded from the internet and signed at the kitchen table does not change title by itself.

Transfers of any interest in freehold land, including life estates and easements, also require an execution search against the registered owner or owners before registration.

Land transfer tax: the question people forget

Land transfer tax is payable by the person who acquires the land or a beneficial interest in it, and it is payable when the transfer is registered. It is normally based on the amount paid for the land, and any mortgage or debt the buyer assumes is added. Ministry guidance says an outstanding encumbrance is taxed as consideration regardless of the relationship between the parties, except for certain spousal transfers.

A gift of land is not exempt from the tax as such, but if no consideration passes in any form between the parties, no tax is payable. Nil-consideration transfers are reported as nil in paragraph 4 of the affidavit, with the relationship and reason in paragraph 5 and encumbrances in paragraph 6.

So a "free" transfer of a mortgaged home may still be taxed on the mortgage the new owner takes over. This is the point where do-it-yourself plans often go wrong.

Common situations and how they are treated

The Regulation 696 exemption cases for spouses are: the only consideration is assuming a registered encumbrance, the transfer complies with a written separation agreement, or it complies with a court order or judgment.

Be cautious with a partition among co-owners. Partition is not taxed if each co-tenant receives land equal in value to their original interest, and the partitioned lands must be contiguous.

Risks of using a generic form

• Title does not change until a transfer is registered by an authorized user.
• A mortgage on the property can create tax even when no money changes hands.
• Giving up your name on title can affect your other rights in the home, so it is worth understanding how before you sign.
• Your title insurance may be affected by adding or removing an owner or by a family transfer. Confirm this with the insurer and a lawyer.
• If a relationship has ended or a death has occurred, other legal steps may be required before a transfer can be registered.

What to do next

• Get a current copy of the title and confirm who the registered owners are.
• Write down why the interest is being given up and whether any money or mortgage is involved.
• Collect mortgage statements, any separation agreement and any trust or estate documents.
• Contact the mortgage lender and your title insurer to find out what they require.
• Ask a lawyer to prepare and register the transfer and handle the tax statements.

Frequently asked questions