Probate and Real Estate Assets in Ontario – Explained
When it comes to estate planning, few topics raise more questions than probate—especially when real estate is involved. If you own a home or other property in Ontario, it’s essential to understand how probate works, how it affects real estate, and what options exist to minimize fees and complications.
In this guide, we’ll break down probate and real estate assets in Ontario in clear, simple terms.
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What Is Probate?
Probate is the legal process where the Ontario courts validate a deceased person’s will and confirm the authority of the estate’s executor. Once granted, this legal approval—called a “Certificate of Appointment of Estate Trustee”—allows the executor to:
Access and manage the deceased’s assets.
Pay off debts and taxes.
Distribute the remaining assets according to the will.
In Ontario, probate also triggers Estate Administration Tax (sometimes called probate fees).
How Does Probate Affect Real Estate in Ontario?
Real estate often forms the largest part of an estate, which means it can significantly impact probate.
If the deceased owned real estate in their name alone:
That property usually requires probate before it can be sold or transferred.
The property’s fair market value at the date of death is included in the estate’s value for calculating probate fees.
If the property was:
Jointly owned with right of survivorship (typically with a spouse), it may bypass probate and automatically transfer to the surviving owner.
Held in a trust or through other legal arrangements, probate might not apply, but legal and tax complexities still need to be reviewed carefully.
How Are Probate Fees Calculated on Real Estate?
Ontario’s Estate Administration Tax is based on the total value of the estate’s assets:
No tax on the first $50,000.
1.5% on everything above $50,000.
Example:
If a home is valued at $700,000 and it’s included in probate:
First $50,000: $0 tax.
Remaining $650,000 × 1.5% = $9,750 probate fee (just on the home).
Other estate assets—like bank accounts, investments, or personal property—are also included in the total probate calculation.
Can You Avoid Probate on Real Estate?
Some property owners try to avoid probate to save on fees or simplify the estate process. Common strategies include:
Gifting the property before death (though this can trigger capital gains tax and cause legal risks).
Joint ownership with adult children (this has risks like exposing the property to their creditors or divorce).
Creating a trust (which requires careful legal planning).
While probate avoidance can sometimes reduce fees, it’s not always the best choice. In many cases, the risks and tax consequences outweigh the savings.
Other Considerations: Capital Gains Tax
Keep in mind that avoiding probate doesn’t mean avoiding taxes:
If the property is not your principal residence, transferring or selling it may trigger capital gains tax on any increase in value since you acquired it.
This applies whether you sell it before death or it’s sold by your estate after death.
Conclusion
Probate is an unavoidable part of many estates in Ontario, especially where real estate is involved. While it’s natural to want to avoid fees, it’s critical to weigh the potential legal, tax, and personal risks before attempting to sidestep probate.
Before making decisions about your property, it’s always best to:
Consult an estate lawyer.
Review your full financial picture.
Consider both short-term savings and long-term consequences.
With the right advice and careful planning, you can navigate Ontario’s probate system with clarity and confidence.
