Selling a house as an estate trustee in Ontario

Selling a house as an estate trustee in Ontario normally starts with probate: applying to the Superior Court of Justice for a Certificate of Appointment of Estate Trustee (or a Small Estate Certificate for estates of $150,000 or less) and paying Estate Administration Tax. That tax is nothing on the first $50,000 of the estate's value and $15 for every $1,000 above it. You can usually clean out, prepare and price the home while you wait, but the buyer's lawyer will want proof of your authority before closing, so plan the timeline with the estate lawyer.

On the tax side, the CRA treats the person who died as having sold their capital property at fair market value just before death. A home that was their principal residence is usually sheltered, but the sale still has to be reported. This guide walks through each step in order. It is not legal or tax advice: the estate lawyer and an accountant should confirm every point for your estate.

Do I need probate to sell the house?

Usually, yes, if the house was in the deceased's name alone. The Government of Ontario says that if the deceased owned real property or assets held by a financial institution, the estate normally must be probated, and that probate may be needed when real property must be sold.

There are situations where a home does not go through the estate, for example where it was owned jointly with someone who survives and passes to them directly. How title was held is the first thing the estate lawyer will check.

Who applies, and where

If there is a will, the person named as estate trustee usually applies. If there is no will, the deceased's spouse or common-law partner usually has the first right to apply, followed by a close adult relative, and a bond is usually required. Applications go to the Superior Court of Justice in the county or district where the person lived when they died. For Orillia, Severn, Oro-Medonte and Ramara, that is Simcoe County.

You will typically need the original will and any codicils, proof of death, the court forms, and payment of Estate Administration Tax. Ontario says complete applications are typically processed within 15 business days, and longer if documents are missing or a judge needs to decide an issue.

Small estates

Since April 1, 2021, estates valued at $150,000 or less can use a simplified small estate process and receive a Small Estate Certificate. It gives the trustee authority over only the assets listed in the certificate, so the house must be listed in the application. If more assets turn up and the total goes over $150,000, a regular Certificate of Appointment is needed.

How much is Estate Administration Tax?

Estate value	Estate Administration Tax
$50,000 or less	$0 (a return is still required)
Above $50,000	$15 for every $1,000, or part of $1,000, above $50,000

Ontario real estate is counted at its value less encumbrances such as a mortgage, collateral mortgage or lien. Bank accounts, investments and vehicles count too.

As an example, an estate worth $650,000 in total would pay $15 on each of the 600 thousands above $50,000: $9,000.

The tax is paid as a deposit when you apply. After the certificate is issued, you must file an Estate Information Return within 180 calendar days, even if the estate owes no tax. Ontario sets fines for failing to file or filing false information, so take the return seriously and let the lawyer handle it if you are unsure.

Can I list the house before probate is granted?

Often you can prepare the house, get pricing opinions and even list it before the certificate arrives. The issue is closing. The estate trustee is the only person with legal authority to manage or distribute the estate, and the buyer's lawyer will want to see that authority before the deal closes. In most cases that means the certificate.

Practical ways to handle the gap:

• Talk to the estate lawyer first. Ask what they will need to close, and how long they expect probate to take for this estate.
• Set a closing date with room to spare. A longer closing gives probate time to come through.
• Disclose the estate status. Buyers and their lawyers should know it is an estate sale and whether the certificate has been issued.
• Have the right person sign. The listing agreement and offers should be signed by the estate trustee in that capacity, not by a family member who is not the trustee.

What should I do with the house while the estate is being settled?

Insure it properly

Call the home insurer right away to tell them the owner has died and who the estate trustee is. The Insurance Bureau of Canada says you must tell your insurer if a home will be unoccupied for more than 30 days, and that you may not have coverage otherwise. Many policies exclude frozen pipes and water damage when a home is vacant, even with the insurer's permission.

Protect it from winter

In lake country, a vacant house through a cold snap is the biggest risk. Keep the heat on, arrange regular checks, and ask the insurer what they require. The Insurance Bureau of Canada suggests shutting off the water supply and draining the lines in a vacant home. For homes on a well and septic, find out where the pump, pressure tank and shut-offs are before winter.

Keep the paperwork together

Collect the deed or title information, survey, property tax bills, utility accounts, mortgage statements, and any septic, well, woodstove and permit records. Buyers of rural homes will ask for them; see the rural property checklist.

What are the tax rules when someone dies?

The deemed disposition

The CRA treats the deceased as having disposed of their capital property at fair market value immediately before death. Any capital gain is reported on the deceased's final tax return.

The principal residence

If the home was the deceased's principal residence, the gain is usually fully or partly sheltered, but it still has to be reported. If the home passes to a surviving spouse or common-law partner (or a spousal trust), the gain can generally roll over to them instead.

A cottage or second property

A cottage, rental or second home that was not designated as the principal residence can produce a taxable gain at death. Many local families own both a house in town and a place on the water, so this is common. An accountant can work out which property to designate for which years.

Growth after death

If the house goes up in value between the date of death and the sale, that change can be taxable to the estate. A beneficiary who takes the house and sells it later measures their own gain from the fair market value reported on the final return.

Get a written valuation as of the date of death. An appraisal or a well-documented market analysis helps the accountant and protects you as trustee. See how to price your home.

Working with the lawyer, the accountant and the family

Estate sales go smoothest when everyone knows who decides what.

• The estate trustee decides, and owes duties to all the beneficiaries. Siblings who are not trustees can have a say, but do not sign.
• Share information in writing. Send the beneficiaries the valuation, the listing price reasoning, and every offer summary. It prevents most disputes.
• Agree on contents early. Decide who gets what before the house is listed. An estate sale company can clear the rest.
• Keep estate money separate. Repairs, utilities, taxes and insurance should be paid from an estate account, with receipts kept for the accounting.
• Bring in the lawyer early if a beneficiary is living in the house, wants to buy it, or objects to the sale.

If you are a trustee who lives out of town, a few things make the process easier. Pick one person, usually the trustee or the estate lawyer, as the single contact for decisions, and ask that offers and documents be sent for electronic signature where your lawyer allows it. Check with the home insurer about coverage while the house is vacant, since many policies have conditions on vacant homes. And set up a way for someone local to check the property regularly and handle access for showings, inspections and contractors.

How Jordan can help

Jordan can provide a written market valuation for the estate file, coordinate showings and access when the trustee lives out of town, and keep the trustee and beneficiaries updated in writing at each step. He will also work with the estate lawyer on timing so the closing date fits the probate timeline. Call 705-345-0797.