- If your parent owned the house and it did not pass to someone else by right of survivorship, the estate normally must be probated, and the certificate should be in hand before anyone signs an Agreement of Purchase and Sale.
- Smaller estates may have simpler routes: a small estate process at $150,000 or less, or transmission without a certificate at $50,000 or less.
- Estate Administration Tax is $15 for every $1,000 (or part) of estate value for estates over $50,000, and a transfer from the estate representative to a beneficiary in satisfaction of the beneficiary's interest in the estate is not taxable under the Land Transfer Tax Act.
You have lost a parent, and the house now needs a decision. Maybe you want to list it quickly, or a buyer has already shown interest. Before anyone signs anything, it helps to know who has the legal authority to sell.
In Ontario, that authority often comes from a court document, and getting the order of steps wrong can stall a sale. This article explains the common paths, the taxes that may come up, and what to sort out first. Every estate is different, so a lawyer can confirm how this applies to yours.
When probate is needed before a sale
An estate normally must be probated if the person who died owned real property that does not pass to someone else by right of survivorship. A house held in your parent's name alone usually falls into that group. A house held jointly with right of survivorship usually does not, because it passes to the surviving owner. There is an exception: if a spouse dies owning a matrimonial home as a joint tenant with someone other than their spouse, for example an adult child, the joint tenancy is deemed severed immediately before death, so the right of survivorship does not operate.
If the property must be sold, the certificate should be obtained before anyone signs an Agreement of Purchase and Sale. Buyers and their lawyers will want to see that the person selling has real authority. Signing first can leave you promising to deliver something you cannot yet deliver.
Smaller estates: simpler routes
Two separate thresholds exist, and they are easy to confuse. They deal with different things, so ask a lawyer which one fits your situation.
| Route | Value limit | What it involves |
|---|---|---|
| Simplified small estate process | $150,000 or less | Form 74.1A application and Form 74.1C draft Small Estate Certificate; the certificate authorizes managing the estate assets listed in it |
| Transmission without a certificate | Total estate value not more than $50,000 | Personal representative applies under Land Titles Act s. 124, stating that no application for a certificate was made and the value limit is met; a covenant to indemnify the Land Titles Assurance Fund is required |
The required statements in survivorship and transmission applications can only be made by a solicitor, who must sign them. How the registration step works in a small estate depends on your situation, so it is worth confirming with a lawyer.
Taxes and costs to expect
Estate Administration Tax is $15 for every $1,000 (or part) of estate value for estates over $50,000, and estates of $50,000 or less pay none. An Estate Information Return is due within 180 calendar days after the estate certificate is issued.
Assets held jointly that automatically become the other owner's on death are excluded from the estate's value for this tax, as is real estate outside Ontario. Whether a particular asset really passes automatically can depend on the facts, so confirm it before you rely on it.
If the estate representative transfers the house to a beneficiary in satisfaction of that person's interest in the estate, the transfer is not taxable under the Land Transfer Tax Act. A beneficiary who receives property by inheritance is deemed to acquire it at fair market value. That figure generally becomes the starting point for working out a gain if the beneficiary later sells, so keep a record of the value. An accountant can help with the details.
Siblings, spouses and other people with a stake
- Siblings who inherit together: joint tenants and tenants in common may be compelled to make or suffer partition or sale, and any interested person may apply to court. Where land passed by will or intestacy, no partition proceeding can be taken until one year after the death.
- Married surviving spouse: if there is no will, a married surviving spouse may instead elect an equalization payment under the Family Law Act, filed no later than six months after the death.
- Common-law spouse: if there is no will, a common-law spouse does not inherit under the Succession Law Reform Act.
These points can change who is entitled to the proceeds and who must agree to a sale. Disagreement among family members is a common reason a sale stalls, so raise it early.
What to do next
- Find the will, and check how title to the house is held (alone, or jointly with someone).
- Do not sign an Agreement of Purchase and Sale until you know whether a certificate is needed and when it will be issued.
- Estimate the total estate value, since it affects which process and how much Estate Administration Tax applies.
- Get a date-of-death value for the house and keep it for tax records.
- Speak with a lawyer about the registration statements, which only a solicitor can make, and about any family disagreement.
- Diarize the 180-day Estate Information Return deadline once the certificate is issued.
Frequently asked questions
Can I list my late parent's house before I have the certificate?
Listing and preparing are generally different from signing a binding agreement. The guidance is that the certificate should be obtained before anyone signs an Agreement of Purchase and Sale. Talk to a lawyer about timing before you accept an offer.
Is probate always required to sell an estate house?
Not always. An estate normally must be probated when the deceased owned real property that does not pass by right of survivorship. Smaller estates may use a simplified process at $150,000 or less, or transmission without a certificate at $50,000 or less.
Do I pay land transfer tax if the estate transfers the house to me?
A transfer from a personal representative to a beneficiary in satisfaction of the beneficiary's interest in the estate is not taxable under the Land Transfer Tax Act. A different arrangement, such as a purchase, can be treated differently, so confirm the facts with a lawyer.
Can my sibling force a sale of the inherited house?
An interested person may apply to court for partition or sale. Where the land passed by will or intestacy, no partition proceeding can be taken until one year after the death.
Sources
- Ontario Ministry of Finance – Transactions for Nominal Consideration — ontario.ca
- Income Tax Act s. 69 (Justice Laws) — Justice Laws (federal)
- Family Law Act, R.S.O. 1990, c. F.3 (e-Laws) — Ontario e-Laws
- Ontario Land Registration Bulletin 2000-6 – Estate documents — ontario.ca
- Ontario – Apply for probate of an estate — ontario.ca
- Ontario – Probate of a small estate — ontario.ca
- Ontario – Estate Administration Tax — ontario.ca
- Ontario – Administering estates — 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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