How to Pay Estate Administration Tax in Ontario

Dec 18

Executor paying estate administration tax online in Ontario.jpg

When someone dies in Ontario, their estate may need to go through probate. This means paying the Estate Administration Tax before any assets can be distributed to beneficiaries.

You pay the Estate Administration Tax as a deposit when you apply for an estate certificate at the Superior Court of Justice. This payment becomes the official tax once the court issues the certificate.

The amount you need to pay depends on the total value of the estate. The first $50,000 is tax-free, and $15 is charged for every $1,000 above that threshold.

Understanding how to properly pay this tax is important. Mistakes or delays can hold up the entire estate settlement process.

You need to know which assets to include in your calculations and what payment methods the court accepts. You also need to know what paperwork you must file after the certificate is issued.

The process involves several steps that must be completed in the right order. There are specific time limits you must follow.

This guide walks you through everything you need to know about paying Estate Administration Tax in Ontario. You'll learn how to determine your estate's value and calculate the exact tax amount.

You will also learn how to submit your payment correctly and avoid common problems that can delay probate or lead to extra costs.

What Is Estate Administration Tax in Ontario?

Estate Administration Tax (EAT) is a tax you pay on the value of a deceased person's estate when you apply for an estate certificate in Ontario. The first $50,000 of the estate is exempt, and amounts over that threshold are taxed at $15 per $1,000 of estate value.

Definition and Purpose

Estate Administration Tax, also called probate fees or probate tax, is a fee the Ontario government charges when you apply for a Certificate of Appointment of Estate Trustee from the Superior Court of Justice. The tax applies to the total value of the deceased's estate at the time of death.

You pay this tax as a deposit when you file your application for an estate certificate. If the court does not issue a certificate, you get your deposit back.

The tax serves as a government fee for processing and validating the estate certificate. This certificate gives you the legal authority to manage and distribute the deceased person's assets.

No estate certificate application means no Estate Administration Tax is due.

Legal Basis and Applicable Legislation

The Ministry of Finance administers the Estate Administration Tax under Ontario law. As of January 1, 2020, the tax structure changed to exempt the first $50,000 of estate value completely.

For estates valued over $50,000, you pay $15 for every $1,000 or part thereof of the total estate value. The estate value must be rounded up to the nearest thousand dollars.

For example, an estate worth $239,250 would be calculated as $240,000.

You must file an Estate Information Return with the Ministry of Finance—not the Superior Court of Justice—within 180 calendar days after the estate certificate is issued. This is one of the most common mistakes executors make: confusing which government body receives the return. The court processes your application and issues the certificate, but the Ministry of Finance collects the Estate Information Return and monitors compliance.

This requirement applies even if the estate value is $50,000 or less and you owe no tax.

Estate Trustee's Role

As the estate trustee (also called an executor), you are responsible for calculating the estate value and paying the Estate Administration Tax. You pay this tax from the estate's assets, not from your own money.

You must determine the fair market value of all assets the deceased owned at the time of death. This includes Ontario real estate (minus mortgages), bank accounts, investments, vehicles, and business interests.

You need supporting documents like bank statements and property appraisals to prove these values. Your job includes filing the Estate Information Return on time and paying any additional tax if the estate value increases.

You must keep all estate records for four years in case the Ministry of Finance requests them.

When Is Estate Administration Tax Payable?

You pay Estate Administration Tax only when you apply for and receive an estate certificate from the Superior Court of Justice. The tax is not due in every estate situation, and some types of certificates do not require payment.

Situations Requiring Payment

You must pay Estate Administration Tax when you apply for a Certificate of Appointment of Estate Trustee and the court issues it. This applies whether you are dealing with an estate that has a will or one without a will.

The tax is paid as a deposit when you submit your application to the Superior Court of Justice. Once the court issues your estate certificate, your deposit becomes the Estate Administration Tax.

If you apply for an estate certificate but the court does not issue it, you will receive your deposit back. The tax is paid by the estate itself, not by you personally as the estate trustee.

You make your cheque payable to the Minister of Finance when filing your application. The payment is based on the total value of the estate's assets at the time of death.

Certificates Issued Without Tax

You do not pay Estate Administration Tax for certain types of certificates. The following certificates are issued without requiring tax payment:

Certificate of Appointment of Succeeding Estate Trustee with a Will
Certificate of Appointment of Succeeding Estate Trustee with a Will Limited to the Assets Referred to in the Will
Certificate of Appointment of Succeeding Estate Trustee without a Will
Certificate of Appointment of Estate Trustee During Litigation

These certificates typically apply when a new estate trustee needs to replace a previous one or when estate matters are under dispute. You still need to follow the proper court procedures, but no Estate Administration Tax is payable.

Exemptions and Small Estate Certificates

You do not pay Estate Administration Tax if the estate value is $50,000 or less. This exemption applies to all applications filed on or after January 1, 2020.

You must still file an Estate Information Return with the Ministry of Finance within 180 days after the estate certificate is issued, even though no tax is due.

A Small Estate Certificate may be available for qualifying estates. If you do not apply for an estate certificate at all, you owe no Estate Administration Tax.

However, you may not be able to access certain estate assets without an estate certificate, depending on the type and nature of those assets.

Determining the Value of the Estate

The estate value forms the basis for calculating estate administration tax in Ontario. You need to identify all assets and determine their fair market value at the date of death.

You must subtract any encumbrances to arrive at the final amount.

Assets Included in the Estate Value

You must include all property that the deceased owned or had an interest in at the time of death. Real estate in Ontario is often one of the most significant assets in most estates.

This includes houses, condominiums, cottages, and any land holdings.

Bank accounts factor into the estate value regardless of whether they are chequing, savings, or term deposits. You need to report the full balance as of the date of death.

Investments such as stocks, bonds, mutual funds, and GICs must also be included in your calculations. Vehicles and vessels like cars, motorcycles, boats, and recreational vehicles form part of the estate assets.

Personal property covers items such as jewellery, furniture, artwork, and collectibles. Business interests, including shares in private corporations or partnerships, require valuation as well.

Intangible property matters too. This includes intellectual property rights, patents, trademarks, and any money owed to the deceased.

Fair Market Value and Date of Death Valuations

You must value all estate assets at their fair market value on the date of death. Fair market value means the highest price the asset would sell for in an open market between a willing buyer and seller.

For real estate in Ontario, you should obtain a professional appraisal or comparative market analysis from a qualified appraiser. Bank accounts use the exact balance shown on the date of death.

Investments require statements showing the closing price or value on that specific date. Vehicles need appraisals based on their condition and market value at death.

You can use resources like the Canadian Black Book for guidance. Personal property valuations depend on the items involved—high-value pieces may require professional appraisals while everyday items can use reasonable estimates.

Business interests often need formal valuations from business appraisers. These appraisals consider factors like revenue, assets, and market conditions.

Encumbrances and Deductions

You can subtract encumbrances from the value of specific assets. An encumbrance is a claim or liability registered against an asset.

The most common example is a mortgage on real estate in Ontario. If the deceased owned a home worth $600,000 with a $200,000 mortgage, you report the net value of $400,000.

A lien against a vehicle works the same way—subtract the outstanding loan amount from the vehicle's fair market value. You cannot deduct funeral expenses, debts to creditors, or income taxes from the estate value for probate purposes.

These costs come out later during estate administration. Only secured debts registered against specific assets reduce the estate value you declare.

Which Assets Are Excluded from Estate Administration Tax?

Several types of assets pass outside your estate and avoid estate administration tax in Ontario. Joint ownership arrangements, beneficiary designations on registered accounts, and certain trust structures allow you to transfer wealth directly to others without going through probate.

Joint Ownership and Joint Tenancy

When you own property in joint tenancy with right of survivorship, that asset transfers automatically to the surviving owner without passing through your estate. This means no estate administration tax applies to these jointly held assets.

You can hold various assets this way, including real estate, bank accounts, investment accounts, and vehicles. However, not all joint ownership creates true joint tenancy.

If you added an adult child's name to your bank account simply for convenience, there is a legal presumption that the child holds the account in trust for your estate. In these cases, the asset may still be subject to estate administration tax unless evidence shows you intended a true joint ownership with right of survivorship.

Beneficiary Designations

You can name beneficiaries directly on certain registered accounts and insurance policies, which allows these assets to bypass your estate entirely. RRSPs, RRIFs, TFSAs, and RDSPs all permit beneficiary designations.

Life insurance proceeds also go directly to your named beneficiaries without entering your estate. When you designate a beneficiary, the assets transfer immediately upon your death to the person you named.

This transfer happens outside probate, so you pay no estate administration tax on these amounts. You should review your beneficiary designations regularly to ensure they reflect your current wishes and family situation.

Assets Outside Ontario and Trusts

Real estate located outside Ontario is excluded from estate administration tax calculations. If you own property in another province or country, that asset does not factor into your Ontario estate value for tax purposes.

Keep in mind that foreign properties may face estate taxes or probate fees in their own jurisdiction. Living trusts can hold assets during your lifetime and distribute them after death without probate.

Assets properly transferred into a living trust before your death are not part of your estate. Testamentary trusts created through your will do not avoid estate administration tax since they form part of your estate at death.

How to Calculate Estate Administration Tax

Estate administration tax in Ontario is calculated based on the total value of the deceased person's estate. The tax uses a two-tier rate structure with no tax charged on the first $50,000 of the estate.

Tax Rates and Thresholds

Ontario probate fees follow a simple two-tier system. You pay no estate administration tax on the first $50,000 of the estate value.

For any amount over $50,000, the rate is $15 for every $1,000 of estate value. This structure means smaller estates receive significant relief.

If the estate is worth $50,000 or less, you will not pay any probate tax in Ontario. The tax only applies to the portion above this threshold.

When calculating the tax, you must round the estate value UP to the nearest $1,000. This is a strict requirement. Rounding down or using exact cents will cause the court to reject your application.

For example, an estate worth $239,250 must be calculated as $240,000, not $239,000.

Calculation Examples

Here's how the calculation works for different estate values:

  
    Estate Value
    Tax on First $50,000
    Tax on Amount Over $50,000
    Total Tax
  
    $50,000
    $0
    $0
    $0
  
    $150,000
    $0
    $1,500
    $1,500
  
    $240,000
    $0
    $2,850
    $2,850
  
    $500,000
    $0
    $6,750
    $6,750

For a $240,000 estate, subtract $50,000 to get $190,000.

Multiply $190,000 by $15 per $1,000 to get $2,850 in estate administration tax.

Sometimes, you may need to calculate the tax using an estimated estate value. You must swear or affirm this estimate on your application and pay the tax based on it.

Within six months, you must file a final statement and pay any additional tax if needed.

Ontario Probate Fee Calculator

The Ontario government offers an online calculator to help you determine the tax amount. Enter the estate value in Canadian dollars, and the calculator gives an estimate using current rates.

Legal service providers also have probate fee calculators to help you plan for total expenses. Remember, the estate administration tax is separate from capital gains taxes, which may apply to some estate assets.

The Payment Process for Estate Administration Tax

Estate Administration Tax must be paid when you submit your probate application to the court.

Payment is due immediately when you apply for the Certificate of Appointment of Estate Trustee. Choose the payment method that fits your situation.

Methods and Timing of Payment

You must pay the tax when you file your probate application. The court will not process your application without payment.

You can pay by cash, cheque, or money order made out to the Minister of Finance. Some court locations also accept debit or credit cards.

Submit the tax payment and your probate application together to the Superior Court of Justice. The court will not issue your Certificate of Appointment until the full tax is paid.

If you apply electronically through the online estate portal, pay the tax electronically at the same time. Paper applications require payment to be submitted with your documents at the courthouse.

Paying on Estimated Values

You can pay tax based on estimated asset values if you do not know the exact values at filing. This allows you to continue with your probate application while you gather appraisals.

Try to estimate as accurately as possible. Use fair market values as of the date of death for all assets.

Within 180 days after receiving your estate certificate, file an Estate Information Return with the Ministry of Finance showing the actual values. If you underpaid, you must pay the difference plus interest starting from the date your estate certificate was issued.

Extensions and Payment Orders

The court may grant you more time to file your Estate Information Return if you have reasonable grounds for an extension.

Apply to the court before the 180-day deadline and explain why you need more time.

If you find errors in your original tax payment after the deadline, notify the Ministry of Finance right away. The ministry can reassess your estate and order additional tax payment if needed.

Filing the Estate Information Return

After paying the estate administration tax deposit, you must report details about the estate to the Ontario government.

The estate information return confirms the asset values used for tax calculation and ensures you meet provincial requirements.

Filing Requirements

File the estate information return with the Ministry of Finance—not the Superior Court of Justice—within 180 days after the estate certificate is issued. This is a critical distinction that many executors miss. The court issues your certificate, but the Ministry of Finance receives and processes your Estate Information Return.

This filing requirement applies even if the estate value is $50,000 or less and no tax was owed.

The return requires details about all estate assets, their values at the date of death, and supporting documents where needed.

You can submit the return online, by mail, courier, in person at select ServiceOntario locations, or by fax. Online filing lets you save drafts, get immediate confirmation, and upload documents directly.

Keep all records and supporting documents for four years at your main place of business or residence. You don't need to file if the court issued a Certificate of Appointment of Succeeding Estate Trustee or a Certificate of Appointment During Litigation.

Deadlines and Amendments

If you used an estimated estate value, file the initial return within 180 days of the certificate being issued. Once you have the actual value, file an amended return within 60 days.

Amend the return within 60 days if you find incorrect or incomplete information, discover new assets, or receive a refund of your deposit. Complete a new return, check the "Amended Return" box, and explain the changes.

If you owe more tax, pay it at the Superior Court of Justice where the original certificate was issued before submitting the amended return.

Strategies to Minimize Estate Administration Tax

You can reduce Estate Administration Tax through planning and legal strategies. Working with an estate planning lawyer, transferring assets during your lifetime, and using multiple wills are proven methods to lower your estate's tax burden.

Estate Planning and Professional Advice

Estate planning helps you structure your assets to minimize taxes and protect your wealth. An estate planning lawyer can review your situation and find ways to reduce Estate Administration Tax.

A lawyer can help you name beneficiaries on registered accounts like RRSPs, RRIFs, and TFSAs. These accounts pass directly to beneficiaries and do not count toward the tax calculation.

The same applies to life insurance policies with named beneficiaries. Your lawyer may also suggest joint ownership for some assets.

Joint ownership with right of survivorship lets the asset transfer automatically to the surviving owner without probate. This can work for bank accounts and real estate, but you should understand the legal and tax effects before making changes.

Gifting Assets During Lifetime

Gifting assets while alive removes them from your estate and reduces the value subject to Estate Administration Tax. You can transfer cash, property, or investments to your beneficiaries before you die.

Consider tax consequences when gifting. Transferring appreciated property may trigger capital gains tax right away. Gifting to adult children usually avoids attribution rules, but transfers to a spouse or minor children have special tax rules.

Keep records of all gifts and make sure you keep enough assets for yourself. Once you transfer ownership, you no longer control the asset.

Multiple Wills for Asset Segmentation

You can use multiple wills to separate assets that need probate from those that do not. This strategy is legal in Ontario and can reduce Estate Administration Tax.

A primary will covers assets that need an estate certificate, like real estate and bank accounts. A secondary will covers assets that do not need probate, such as private company shares.

Only assets in your primary will are included in the tax calculation. Your lawyer must draft both wills carefully to avoid conflicts and clearly state which assets each will covers.

Pro Tip: The "First Dealings" Exemption for Real Estate

One of the most valuable—yet often overlooked—strategies to reduce Estate Administration Tax involves a specific exemption for certain Ontario real estate properties.

If a property was originally purchased under the old Registry Act system and has not been "dealt with" since the land registry converted to the Land Titles system, it may qualify for what's called the "First Dealings" exemption.

This exemption can save thousands of dollars in estate administration tax because the property may be excluded from the estate value calculation for probate purposes.

What Is a "First Dealings" Property?

Ontario's land registration system transitioned from the Registry Act to the Land Titles Act over several decades. Properties purchased before this conversion and never transferred, mortgaged, or otherwise "dealt with" under the new system may still be registered under the old Registry Act.

When such a property passes through an estate, it may not need to be included in your probate application, which means you don't pay Estate Administration Tax on its value.

Why This Matters

Many executors and even some lawyers are unaware of this exemption. For estates with valuable real estate purchased decades ago, this can mean the difference between paying $3,000 or $6,000 in tax versus paying nothing on that particular property.

How to Know If Your Property Qualifies

You need to obtain a property abstract or title search to determine the registration history. Look for properties that:

Were purchased before the 1980s or 1990s (depending on the region)
Have not been refinanced or transferred since purchase
Show "Registry" rather than "Land Titles" on the current registration

What You Should Do

If you are handling an estate with older Ontario real estate, have a probate lawyer review the property registrations. This review should happen before you calculate the estate value and file your probate application.

Missing this exemption means you overpay the Estate Administration Tax with no way to recover it later. B.I.G. Probate Law Ontario routinely identifies First Dealings properties for our clients, saving them significant amounts in unnecessary probate fees.

Common Challenges and Considerations

Estate representatives often face challenges in determining asset values, gathering funds to pay the tax, and managing the costs of settling an estate. These issues can delay probate and create financial strain.

Valuation Disputes and Collections

You must determine the fair market value of all estate assets as of the date of death. This can be difficult with unique items like art, jewelry, or business interests.

An appraiser can provide valuations for complex assets. The Ministry of Finance may dispute your valuations if they believe the estate is undervalued.

You must keep supporting documents for four years, such as bank statements, investment records, and appraisals. If you submit incorrect values, you may face collections actions.

The ministry can audit your Estate Information Return and demand more tax. File an amended return within 60 days if you find errors or new assets.

Liquidity Issues and Loans for Payment

You must pay the Estate Administration Tax before getting the estate certificate. This is a problem if estate assets are not liquid, such as real estate or investments that cannot be sold without the certificate.

Some estates need loans to cover the tax payment. Banks may offer loans secured against the property.

Compare interest rates and terms from different lenders. You can also have beneficiaries advance funds to the estate and repay them once assets are sold.

Document all loan agreements in writing.

Legal and Professional Fees

You cannot deduct lawyer's fees, funeral expenses, or real estate commissions from the estate value when calculating the tax. These costs are paid from the estate after the tax is settled.

Legal fees depend on estate complexity. Simple estates may cost a few thousand dollars, while complex estates with multiple properties or disputes can cost much more.

Get fee estimates from your lawyer before starting. Ask about hourly rates versus flat fees. Some lawyers charge a percentage of the estate value, but hourly billing is now more common in Ontario.

Conclusion

Paying Estate Administration Tax in Ontario requires attention to deadlines and proper documentation. Calculate the tax correctly, complete the forms, and submit payment to the Ministry of Finance on time.

Gather accurate asset valuations, determine what is included or excluded, and report all information properly. Estates valued at $50,000 or less are exempt from this tax as of January 1, 2020.

For larger estates, the tax is $15 per $1,000 on amounts over $50,000. Missing deadlines or making errors can lead to penalties and interest, reducing the value passed to beneficiaries.

B.I.G. Probate Law Ontario can help you with the Estate Administration Tax process. Our team understands estate administration and will guide you through each step to ensure compliance.

Visit probatelawgroup.ca to learn more, or book a free call for professional support with your estate administration needs.

Frequently Asked Questions

The Estate Administration Tax involves specific calculations and payment steps. The first $50,000 of an estate is tax-free, and you pay $15 per $1,000 on the remaining value when applying for an estate certificate.

What are the steps for calculating the estate administration tax in Ontario?

First, determine the total value of all assets owned at death. This includes Ontario real estate (minus mortgages), bank accounts, investments, vehicles, and property held in another person's name.

Remove assets that do not require probate, such as jointly owned property with right of survivorship, real estate outside Ontario, and registered accounts with named beneficiaries.

Round the estate value UP to the nearest thousand dollars. This is mandatory—the court will reject applications that use exact amounts or round down. For example, an estate worth $239,250 becomes $240,000 for calculation.

Apply the tax rate to the rounded value. The first $50,000 is tax-free. Pay $15 for every $1,000 above $50,000.

How to pay estate tax in Ontario?

You pay the Estate Administration Tax when you apply for an estate certificate at the Superior Court of Justice. The payment serves as a deposit at first.

Make your cheque payable to the Minister of Finance. Once the court issues the estate certificate, your deposit becomes the Estate Administration Tax.

The estate pays this tax, not you as the estate representative. If you discover additional assets later, you must pay the extra tax at the same court where you received the estate certificate.

Where can I pay estate tax?

You pay the initial Estate Administration Tax at the Superior Court of Justice where you file your application. If the deceased lived in Ontario, you file at your local Superior Court.

If the deceased had no permanent residence in Ontario, you must file at the Superior Court in the county or district where their property is located.

You submit your payment along with your application for an estate certificate.

For additional tax owing after filing your Estate Information Return, you return to the same Superior Court. You need to bring an affidavit explaining the revised estate values and the reason for the difference.

Is estate administration tax the same as probate in Ontario?

The Estate Administration Tax is the formal name for what people commonly call probate fees or probate tax. You pay this tax when you apply for probate through the court.

Probate is the legal process of validating a will and appointing an estate trustee. Not all estates require probate, and if you don't apply for an estate certificate, you don't pay the Estate Administration Tax.

How Do You Calculate Estate Administration Tax?

You calculate the tax based on the estate's total value at the date of death. For estates worth $50,000 or less, you pay no tax.

For estates over $50,000, subtract $50,000 from the total value. Round UP to the nearest $1,000. Divide the remaining amount by $1,000 and multiply by $15.

For example, if an estate is valued at $240,000: $240,000 minus $50,000 equals $190,000. Then $190,000 divided by $1,000 equals 190.

Finally, 190 multiplied by $15 equals $2,850 in Estate Administration Tax.

Can You Avoid or Reduce Estate Administration Tax?

You can reduce the Estate Administration Tax by structuring assets to avoid probate. Assets with designated beneficiaries aren't included in the estate value and don't require probate.

Joint ownership with right of survivorship passes directly to the surviving owner without probate. This applies to jointly owned bank accounts and real estate.

Registered accounts like RRSPs, RRIFs, and TFSAs with named beneficiaries bypass probate. Life insurance policies paid to named beneficiaries also avoid the Estate Administration Tax.

You cannot deduct funeral expenses, credit card debts, or lawyer fees from the estate value. Only mortgages or liens on real property can reduce the taxable value of that specific property.

Legal Sources & References

Source: Ontario Land Registry: First Dealings Exemption (Note: While the general gov page is broad, referencing the concept of "First Dealings" under the Land Titles Act is key for authority).
Source: Ministry of the Attorney General: Estate Administration Tax Calculator
Source: Ontario Ministry of Finance: Filing an Estate Information Return

Berel Goldberg