Blog > Probate Tax on a Markham Home: What Estates Pay
Probate & Estate Sales · Markham
How much is probate tax on a Markham home in Ontario?
Ontario charges no Estate Administration Tax on the first $50,000 of an estate, then $15 for every $1,000 above that, about 1.5%. A mortgage registered on the home is deducted first. On a $1.3M estate, the tax is about $18,750.
When a parent passes away and the family home in Markham is in their name alone, the house usually becomes the largest asset in the estate. It is also the asset that drives most of the probate bill.
Families often hear the phrase probate fees and expect a large lawyer's invoice. In Ontario, the bigger number is usually a provincial tax called the Estate Administration Tax. Understanding how it works helps the estate trustee plan the sale of the home, the timing, and the cash needed before anyone receives an inheritance.
How Ontario's Estate Administration Tax Works
For estate certificate applications made on or after January 1, 2020, the Government of Ontario sets the tax this way:
- First $50,000 of the estate: no tax.
- Everything above $50,000: $15 for every $1,000 (or part of $1,000), which works out to about 1.5%.
The tax is paid by the estate, not by the estate trustee personally. It is paid as a deposit when the estate trustee applies to the Superior Court of Justice for a Certificate of Appointment of Estate Trustee, often called probate.
What Counts Toward the Estate Value
The tax is based on the fair market value of the assets that pass through the estate on the date of death. For most Markham families, that includes:
- A home held in the deceased's name alone
- Bank and investment accounts with no named beneficiary
- Vehicles and other personal property
Some assets usually pass outside the estate and are not counted, such as a home held in joint tenancy with a surviving spouse, or registered accounts and insurance policies with a named beneficiary. The estate lawyer confirms what is included.
The one key deduction: a mortgage or lien registered against Ontario real estate in the estate is subtracted from the value. Other debts, such as credit cards, lines of credit that are not registered on title, or funeral costs, do not reduce the taxable value.
A Markham Example, Step by Step
Here is a simplified, illustrative example for a detached home in Markham held in one parent's name.
| Item | Amount |
|---|---|
| Fair market value of the Markham home | $1,400,000 |
| Less: mortgage registered on the home | −$200,000 |
| Plus: other estate assets (no beneficiary) | $100,000 |
| Estate value for tax purposes | $1,300,000 |
| Less: $50,000 exemption | −$50,000 |
| Taxable portion | $1,250,000 |
| Estate Administration Tax ($15 per $1,000) | $18,750 |
Illustrative only. The estate lawyer confirms the final figures. Legal fees, capital gains on non-exempt property, and selling costs are separate.
Why the Home's Value Matters So Much
Because the tax is calculated on fair market value, the estate needs a defensible value for the home as of the date of death. Guessing too low can create problems later. Guessing too high means the estate pays more tax than it needs to.
This is where a local, well-documented valuation helps. Michael John Lau prepares estate valuations from recent sold comparables on the same street and in the same neighbourhood, not from online estimates. You can see how that works on the free home evaluation page.
The 180-Day Estate Information Return
After the court issues the estate certificate, the estate trustee must file an Estate Information Return with the Ontario Ministry of Finance within 180 calendar days. The return lists the estate's assets and their values. It must be filed even when the estate is worth $50,000 or less and no tax is owed.
If a value turns out to be different from what was first reported, an amended return may be required, and extra tax may be owed. Keeping good records of how the home's value was determined makes this step much easier.
Planning the Sale of the Home
Many estates sell the family home to pay the tax, legal fees, and final taxes, and to divide the inheritance fairly. A few practical points:
- Timing: in most cases, a buyer's lawyer will need the estate certificate before closing, so the listing plan should match the probate timeline.
- Carrying costs: property tax, insurance, and utilities continue while the home is vacant. Check that the insurance still covers an unoccupied home.
- Preparation: clearing, cleaning, and light repairs often make a meaningful difference to the final price.
The step-by-step estate sale guide and the probate and estate sales page walk through each stage in more detail.
Frequently Asked Questions
Is there an inheritance tax in Ontario?
No. Canada has no inheritance tax. Ontario charges Estate Administration Tax on estates that go through probate, and the deceased's final tax return may include capital gains on some assets. The principal residence exemption often applies to the family home, and the estate's accountant confirms this.
Can I deduct the mortgage on the Markham home?
Yes. A mortgage or lien registered against Ontario real estate in the estate is deducted from the estate's value. Unsecured debts such as credit cards and funeral costs are not deducted for this tax.
When is Estate Administration Tax paid?
It is paid as a deposit when the estate trustee applies for the Certificate of Appointment of Estate Trustee. If the final value changes, the difference is settled when the Estate Information Return is filed.