Written by Ron Cooke, President & Founder of Strategic Wealth Protection Partners in Ontario
What happens when you inherit a house in Ontario?
Q: When You Inherit a House Is It Taxable in Ontario?
A: When you inherit a house in Ontario, ownership is transferred to you according to the deceased’s will or estate plan.
While there is no inheritance tax in Ontario, the estate may need to settle the Estate Administration Tax (EAT) based on the property’s value before it is transferred. Additional taxes may apply depending on how the property is used after inheritance.
Do I have to pay taxes on a house I inherit in Ontario?
You do not pay inheritance tax on a house in Ontario.
However, the estate must pay any applicable Estate Administration Tax before the transfer. If you later sell the property or it is not your principal residence, you may be subject to capital gains tax on any increase in the property’s value.
Learn more about how to avoid estate tax in Ontario >
How do I avoid capital gains tax on inherited property in Ontario?
To avoid capital gains tax on inherited property, you can designate it as your principal residence, which exempts it from such taxes.
If the property is not your principal residence, gifting or selling it while the value is low may reduce the taxable amount. Consulting with an estate planning professional can help tailor strategies to minimize taxes.
What are the estate taxes on a primary residency in Ontario?
A primary residence is exempt from capital gains tax, but the estate may need to pay the Estate Administration Tax (EAT) when transferring ownership.
The EAT is $15 per $1,000 of value above $50,000. Proper planning, such as using a living trust, can help reduce or avoid this cost.
What are the estate taxes on vacation or rental property in Ontario?
Vacation and rental properties are subject to capital gains tax on any appreciation in value since they are not considered principal residences.
The estate is responsible for paying this tax before transferring ownership. Additionally, the Estate Administration Tax applies, further increasing costs.
How can you minimize estate taxes on real estate in Ontario?
Minimizing estate taxes on real estate can be achieved through strategies like holding the property in a trust, gifting it to beneficiaries during your lifetime, or co-owning the property with rights of survivorship.
Using multiple wills can also exclude certain assets from probate. Consulting with a professional ensures these strategies are implemented effectively and align with Ontario laws.
Avoid Ontario’s Hefty “Death Tax”
While Ontario doesn’t have a direct estate tax on your total net worth, income tax on capital gains and deemed dispositions can have a significant impact on your estate.
These taxes can dramatically reduce the wealth you pass on to your loved ones.
For instance, assets like real estate (excluding your principal residence) and non-registered investments are deemed sold at fair market value upon death. The resulting capital gains are usually taxed at Ontario’s highest marginal tax rate, which exceeds 53.53% (2024).
Here’s an example: If you have an RRSP or RRIF worth $1,000,000, the government could take $535,000 in taxes upon your death.
That’s more than half of your hard-earned savings—gone to taxes, not your family. And that’s before factoring in additional costs like probate fees, executor fees, legal fees, and accounting fees. What will be left for your family?
Did you know that some of your assets may even face double taxation? Without proper planning, the total financial burden on your estate could be staggering.
Simple Steps Can Save You Millions
With our Living Estate Plan, you can not only minimize taxes but also protect and even grow your wealth. Our proven strategies help shield your assets, ensuring more of your legacy goes to your loved ones—not the government.
Discover How to Minimize Taxes and Secure Your Legacy
Did you know that without a solid estate plan, taxes and fees in Ontario could claim a significant portion of your wealth?
If you’ve worked hard to build your business, investments, and properties, protecting your legacy for your loved ones is critical. At Strategic Wealth Protection Partners, we specialize in helping high-net-worth individuals in Ontario secure their financial futures.
Our Living Estate Plan is designed to:
- Reduce estate taxes and probate fees.
- Simplify wealth transfer to your loved ones.
- Reflect your values and priorities in every detail.
Your Legacy Matters
With our personalized guidance, we’ll help you navigate options like Living Trusts to protect your assets and ensure your family’s peace of mind. Contact us today to book your Living Estate Plan Consultation and take the first step toward a secure future.
Schedule a Living Estate Plan Consultation
Planning your legacy is about more than numbers—it’s about ensuring your family remembers you and your values are honoured for many years to come.
Estate planning and trusts can feel overwhelming, especially if it’s your first time. That’s why we’re here.
With our simple, 5-Step Living Estate Plan, we make the process easy, helping you create a comprehensive estate plan or trust that protects your assets from taxes and probate fees while preserving your legacy. Tools like The Final Word Journal capture your story, wishes, and essential details like accounts and end-of-life plans, ensuring your family has clarity and comfort.
Take the first step today—schedule a consultation call and give your family the ultimate gift: peace of mind and the assurance they were always your priority.
Read More
If you’re starting your estate planning process, you may find these articles helpful:
- Can I Put My House in a Living Trust in Canada?
- Do Trusts Pay Taxes in Canada?
- Pros and Cons of Putting a House in a Trust in Canada
About the Author
RON COOKE, PRESIDENT & FOUNDER OF STRATEGIC WEALTH PROTECTION PARTNERS
With over 30 years in financial services, I’ve seen the challenges families face when a loved one passes—lost assets, unnecessary taxes, and emotional stress. That’s why I created the Living Estate Plan, a comprehensive process to protect assets, eliminate estate and probate fees, and create legacies that are remembered for many years to come.
This plan ensures your family receives not just your wealth, but a meaningful reminder of your care and love. Tools like The Final Word Journal capture your story, wishes, and essential details, offering clarity and comfort during difficult times.
Your final gift should be more than money—it should be peace of mind, cherished memories, and an organized estate.
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Schedule a 30-minute consultation call with Strategic Wealth Protection Partners. Click HERE to schedule a consultation.
