Selling an Inherited Home in Ontario: Probate, Estate Administration Tax, Vacancy Insurance and Sibling Disagreements

Quick answer: If a home was owned solely by the person who passed away, the executor (called the estate trustee in Ontario) usually needs a Certificate of Appointment of Estate Trustee (probate) before the sale can close. Ontario’s Estate Administration Tax is $0 on the first $50,000 and 1.5% on the value above $50,000. Before selling, the executor should notify the home insurer (vacancy can void coverage), secure and maintain the home, get a date-of-death valuation for tax purposes, and keep siblings or beneficiaries informed in writing. You can often list while probate is in progress, as long as the closing date allows for it.

Key takeaways

• Call the home insurer in week one. Most standard policies restrict coverage once a home has been vacant for 30–60 days.
• Get a date-of-death appraisal or a broker’s opinion of value. It matters for the final tax return and capital gains.
• Communication prevents conflict. Share a written plan and regular updates with all beneficiaries.

First: is probate even needed?

Smaller estates: Ontario has a simplified Small Estate court process for estates valued at $150,000 or less. Most GTA homes push an estate above that, though.

Step-by-step: the executor’s timeline

Probate timelines in busy court regions can stretch from several months to longer. Your lawyer can estimate yours.

The costs and taxes, explained simply

1. Estate Administration Tax (probate tax)
$0 on the first $50,000, then 1.5% above that.
Example: a $1,100,000 home (with no other probated assets): ($1,100,000 − $50,000) × 1.5% = $15,750.

2. Capital gains

• If the home was the deceased’s principal residence for all the years they owned it, the gain up to the date of death is usually tax-free.
• Any increase in value after death, while the estate holds the home, can be taxable to the estate. That’s why the date-of-death valuation matters.
• If it was a rental or second property, capital gains tax applies on the deemed sale at death.

3. Ongoing carrying costs
Property tax, utilities, insurance, maintenance and any mortgage are usually paid by the estate. Track every receipt.

4. Real estate commission, legal fees and clean-out
These are deductible from the estate’s proceeds.

The vacant home insurance gap (the risk most executors miss)

Most home policies have a vacancy clause. If the home is unoccupied beyond a set period (commonly 30–60 days), coverage for things like water damage, vandalism or freezing pipes may be reduced or void.

Do this:

• Call the insurer right away. Ask about a vacancy permit or a vacant home policy.
• Arrange regular inspections (often weekly or as the policy requires) and keep a log.
• Keep the heat on in winter, and consider shutting off the main water supply.

Sell as-is or fix up first?

Preventing sibling and beneficiary conflict

• Share a written plan: timeline, budget, agent choice and pricing approach.
• Get two or three opinions of value if beneficiaries disagree on price.
• If a sibling wants to buy the home, get an independent appraisal and treat it like an arm’s-length sale, with full disclosure to the other beneficiaries.
• Keep the accounts transparent: every expense and every dollar from the sale.
• Use mediation early if things get tense. Court is slow and expensive.

Mistakes executors make

• Letting the insurance lapse or ignoring the vacancy clause.
• Accepting a “quick cash” offer without market exposure. Executors have a duty to get fair market value.
• Distributing money before taxes are settled. Executors can be personally liable for unpaid taxes.
• Throwing out documents during the clean-out.
• Choosing a closing date before probate is likely to be granted.

FAQ

Can I sell a house before probate is granted in Ontario?
You can usually list and accept an offer, but if the deceased owned it alone, closing typically needs the Certificate of Appointment. Set the closing date accordingly.

How much is probate in Ontario?
Estate Administration Tax is $0 on the first $50,000 and 1.5% on the rest of the estate’s value subject to probate.

Do we pay capital gains on an inherited home?
Usually not on gains up to the date of death if it was the principal residence, but the estate may owe tax on any increase after death.

Can a sibling live in the house while it’s being sold?
Possibly, with the executor’s agreement, but it affects insurance, showings and fairness to the other beneficiaries. Put any arrangement in writing.

General information only, not legal or tax advice. Every estate is different, so work with an estate lawyer and an accountant.

Sources: Ontario: Estate Administration Tax · CRA: Clearance certificate