Estate Planning and Your Home: What Every Richmond Hill and Markham Homeowner Needs to Know

Your home is likely the most valuable thing you own. But have you ever thought about what happens to it when you are no longer here? Most families in Richmond Hill and Markham have not. This guide walks through what Ontario's rules actually mean for your real estate, what catches families off guard and what you can do now to protect the people who matter most.

Table of Contents

• Wait, There Is No Inheritance Tax in Canada?
• What Are Probate Fees and Why Should You Care?
• The Tax Event Nobody Warns You About
• Why Your Family Home Is Usually Safe
• What Happens When the Home Goes to Your Spouse
• Why the Way Your Name Appears on the Title Matters
• The Multiple Wills Strategy (and Why It Saves Money)
• If You Own a Rental Property, Read This Section Carefully
• The Documents You Need Before You Need Them
• Five Things You Can Do This Month
• Frequently Asked Questions

Wait, There Is No Inheritance Tax in Canada?

That is correct. Canada eliminated its federal estate tax back in 1972. If your parents leave you a house, you do not pay tax on the fact that you received it. That part is good news.

Here is the part that catches families off guard: the estate itself still faces costs before anything gets distributed. The Canada Revenue Agency treats the deceased as having sold all of their assets at fair market value immediately before death. Any gains on those assets get taxed on the deceased's final tax return. On top of that, Ontario charges a probate fee based on the total value of the estate.

For a York Region family that owns a home, an investment property and some registered accounts, the combined bill can be significant. With the right planning, that number can be reduced by 40 to 60%. Without planning, the estate pays full freight.

The difference comes down to whether the right ownership structures, beneficiary designations and wills are in place before they are needed. None of this is complicated. It just needs to be done.

What Are Probate Fees and Why Should You Care?

When someone dies, their will usually needs to be "probated" by the Ontario Superior Court. This is the court's way of confirming the will is valid and that the estate trustee (executor) has the authority to distribute assets. Ontario charges a fee for this process called the Estate Administration Tax.

The math is straightforward. There is no charge on the first $50,000 of estate value. Everything above that is taxed at 1.5%. On a $1.5M home, that works out to roughly $21,750 in probate fees alone. On a $2.5M estate, it is closer to $36,750.

That is a meaningful amount of money, and it is one of the reasons people explore strategies like joint tenancy, named beneficiaries and multiple wills to reduce the assets that flow through probate. We will cover each of those later in this guide.

The Tax Event Nobody Warns You About

This is the one that surprises the most families. At death, the CRA treats you as if you sold everything you owned immediately before you died. If your assets went up in value since you bought them, the gain is taxable. This is called "deemed disposition."

For your family home, the Principal Residence Exemption usually eliminates the tax (more on that in the next section). But for investment properties, rental homes, cottages and non-registered investment accounts, there is no automatic exemption. The gain gets added to the deceased's final income tax return and taxed at whatever marginal rate applies.

Here is a scenario that plays out regularly in York Region. A family owns a rental property they purchased years ago. The property has doubled in value. At death, the capital gain on that property is taxable. The estate trustee needs to pay that tax bill before distributing any assets. If there is not enough cash in the estate, the property may need to be sold quickly to cover the bill, sometimes at a discount.

This is exactly the kind of situation that estate planning aims to prevent. Whether through life insurance, strategic gifting during your lifetime or spousal rollovers, there are ways to manage the impact. The key is knowing the exposure exists before it becomes urgent.

Why Your Family Home Is Usually Safe

The Principal Residence Exemption (PRE) is the most valuable tax benefit available to Canadian homeowners. It means the capital gain on your principal residence is completely tax-free, whether you sell it during your lifetime or it is deemed disposed at death.

If you bought your Richmond Hill home for $400,000 in 2005 and it is worth $1.5M today, that $1.1M gain is fully exempt from tax as long as the home was your principal residence for every year you owned it. This is why the family home is often the most tax-efficient asset in an estate.

There are a few important things to know. You can only designate one property as your principal residence in any given year. If you own both a home and a cottage, only one gets the exemption each year. The other will face capital gains tax at death. If you converted part of your home to a rental unit (a legal basement apartment, for example), the rental portion may not qualify for the full exemption. And if the home was not your principal residence for the entire period of ownership, the exemption is prorated accordingly.

For most families who own one home and live in it, the PRE takes care of the biggest asset in the estate. It is the families who own multiple properties where careful planning makes the most difference.

What Happens When the Home Goes to Your Spouse

If your home passes to your surviving spouse or common-law partner, essentially everything is deferred. The property transfers at your original cost base rather than its current market value. No capital gains tax is triggered. And if the home is held in joint tenancy with right of survivorship, it passes automatically outside the will, which means no probate fees either.

This is the most powerful estate planning tool for married couples and common-law partners. It defers all tax consequences until the surviving spouse dies or sells the property. For many families, this means the real estate planning urgency is about the second death, not the first.

One important detail: the spousal rollover only applies if the property goes directly to the spouse. If your will leaves the home to your children instead of your spouse (even if your spouse is still alive), the deemed disposition rules apply and capital gains tax may be triggered. Make sure your will reflects your actual intention.

Why the Way Your Name Appears on the Title Matters

How your property title is structured has a direct impact on what happens at death. There are two common forms of co-ownership in Ontario and they work very differently.

Joint tenancy with right of survivorship is the standard for most married couples. When one owner dies, the property automatically passes to the surviving owner outside the will. It does not go through probate and no Estate Administration Tax is charged. It is the simplest and most effective probate avoidance tool for spouses.

Tenancy in common means each owner holds a defined share of the property. When one owner dies, their share passes through their will and is subject to probate. This structure is appropriate when co-owners are not spouses, when each owner wants their share to go to their own beneficiaries or when the ownership split is not equal.

A question that comes up often in York Region: should parents add their adult children to the title of the family home to avoid probate? The answer is almost always no. Adding a child to the title can trigger capital gains tax on part of the property, expose the home to that child's creditors or divorce proceedings, affect the Principal Residence Exemption and create attribution rule issues. The probate savings on a typical York Region home rarely justify these risks. A multiple wills strategy or trust structure accomplishes the same goal without the downsides.

The Multiple Wills Strategy (and Why It Saves Money)

Ontario recognizes a strategy where you create two separate wills. The "primary" will covers assets that require probate, such as real estate, bank accounts and publicly traded investments. The "secondary" will covers assets that do not require probate, such as privately held company shares, personal property and household contents.

Because the secondary will is not submitted for probate, the assets it covers are not subject to Estate Administration Tax. For business owners in York Region who hold privately held company shares (common among entrepreneurs in Markham's tech corridor), this strategy can save a meaningful amount in probate fees.

Real estate in Ontario generally requires probate to transfer title, so your home will typically fall under the primary will. But the multiple wills strategy reduces your overall probate exposure by pulling other assets out of the calculation. Your estate lawyer can advise on whether this approach fits your situation.

If You Own a Rental Property, Read This Section Carefully

If you own investment property in York Region, whether it is a rental home, a property with a basement apartment rented to a non-family member or a second property that is not your principal residence, the capital gains exposure at death can be substantial.

The math is simple but the numbers are not small. If you purchased a rental property for $500,000 and it is worth $1,100,000 at death, the $600,000 gain does not just disappear. Half of it gets added to your final income and taxed at your marginal rate. That tax bill needs to be paid before your family receives anything from the estate.

The families who handle this well are the ones who saw it coming. They purchased life insurance to cover the estimated tax liability so the estate has immediate cash. Or they transferred the property to a spouse during their lifetime, which defers the gain. Or they worked with an accountant to time a strategic sale during a lower-income year. Each approach has trade-offs, and the right answer depends on your family structure and asset mix. But the worst approach is doing nothing and leaving your estate trustee to scramble.

The Documents You Need Before You Need Them

Estate planning is not just about what happens after death. It is also about what happens if you become unable to manage your own affairs due to illness, injury or cognitive decline. Without the right documents, your family may need to apply to the court for guardianship. That process is expensive, time-consuming and emotionally difficult.

A Power of Attorney for Property authorizes someone you trust to manage your financial affairs, including buying, selling or mortgaging real estate. If you own a home in Richmond Hill or Markham and become incapacitated without this document, your family cannot sell the home, refinance the mortgage or manage the property without a court order.

A Power of Attorney for Personal Care authorizes someone to make health care decisions on your behalf. While it does not directly relate to real estate, it is part of the same planning conversation and is typically prepared alongside your will and property POA.

Both documents should be prepared by an estate lawyer, signed while you are mentally capable and stored where your family can find them. The cost is typically $200 to $500 per document. For a couple, a complete estate planning package (two wills, two property POAs and two personal care POAs) usually costs $1,500 to $3,500 with an estate lawyer in York Region. That is a fraction of what it costs if you skip this step and your family has to go through the courts.

Five Things You Can Do This Month

1. Check how your property title is held. Pull up your title or call your lawyer. Confirm whether your home is held in joint tenancy or tenancy in common. If you are married and want the home to pass to your spouse without probate, joint tenancy with right of survivorship is the standard approach. If your situation is more complex (second marriage, blended family, co-ownership with a non-spouse), get professional advice on the right structure.

2. Get a will in place (or update the one you have). If you do not have a will, Ontario's intestacy rules decide who gets your assets, and the result may not match your wishes. If your will predates your current home, your marriage, your children or an investment property, it needs updating. Review it every 3 to 5 years or after any major life event.

3. Sign Powers of Attorney while you are healthy. Both Property and Personal Care. The cost is modest. The cost of not having them is not.

4. Review your beneficiary designations. Make sure your RRSP, RRIF, TFSA and life insurance policies have named beneficiaries. Ideally your spouse for registered accounts to enable the tax-free rollover. Assets with named beneficiaries bypass probate entirely.

5. Know what your investment properties will cost the estate. If you own a rental property, cottage or second property, ask your accountant to estimate the capital gains tax liability at current market values. If the number is significant, start exploring life insurance or other strategies to fund that bill without forcing a quick sale.

Note: This guide is for general information purposes only and does not constitute legal, tax or financial advice. Estate planning rules are complex and vary based on individual circumstances including marital status, family structure, property ownership and asset mix. Capital gains inclusion rates, probate fee structures and tax rules may change. For advice specific to your situation, consult a licensed estate lawyer and chartered professional accountant. Market values referenced reflect York Region conditions as of 2026.