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Inheriting a property in Canada

Updated: Jun 14

Have you inherited real estate in Canada and are lost about what to do? Inheriting property can be overwhelming, especially if you are not the only one who has acquired the property and you live in a different city.

But don’t worry! Figuring out what to do with inherited property doesn’t have to be completely overwhelming. In this article, we will look at how to deal with acquired property if there is more than one owner.

What Is an Inherited Property?

An inherited property is passed down to you from a relative, such as parent or relative. Usually, this happens when that relative passes away, which can make the circumstance all the more emotional and stressful.

If you inherited a home, it will be regarded as a primary residence, meaning you are considered to live there full-time. In this case, you don't need to pay to have the property moved to your name or title.

If you inherited a cottage/vacation home, it will be considered a secondary residence, which means you don't live there full-time and just live there occasionally. You may need to pay for ownership transfers with a secondary residence.

What Type of Lawyer Do You Need?

While you are not required to hire a lawyer to probate an estate -- which is the legal process for administering the estate -- it is advisable.

To figure out which legal advisor would be best for your circumstance depends on the situation. If you may need to challenge a will, you should contact an estate lawyer for advice. You should also contact a real estate lawyer if you need help selling the property.

What Are the Taxes for Inheriting Real Estate?

In Canada, there are no inheritance taxes, so you do not need to pay to assume title over a property. If you choose to move in, you will assume property taxes, repairs, mortgage payments (if any), maintenance, and other related expenses. Before moving in, hire a home inspector to evaluate the property so you have an idea of what should be updated or repaired.

If you choose to sell, you may have to pay capital gains tax. Capital gains tax is viewed as taxable income in Canada and it is what you pay on the profit of the deal. You will be taxed on the fair market value at the time you acquired the property, until the time you sell. The taxes apply to half of the capital gain. If the house has been your primary residence for as long as 2-5 years, you may not be subject to capital gains tax.


If a bungalow was purchased for $200,000 and is currently worth $500,000, the capital gain is $300,000 and you would owe taxes on $150,000.

If you choose to lease the inherited property, you will owe capital gains taxes since you are designating the property as an investment property. You may owe on the difference of the inherited value and the fair market value when you started to lease it out.

While the property will provide a passive monthly income, as a landlord you will be in charge of maintaining the property. You must get familiar with your local zoning by-laws and residential tenant act to ensure you are in legal compliance.

Other Possible Fees Involved

If you choose to sell the property with a Realtor on the MLS, you will be exposed to listing expenses, attorney costs, examination expenses, and fees. You may also need to pay a probate fee.

Click here to learn how you can save on fees with 519housebuyer.

A probate fee is for validating a will and administering the estate. While you don’t need to pay transfer fees, you need to pay probate fees in Canada. Your new estate's assets will be used to decide how large the probate fee is. Assets considered include things like:

  • Real Estate

  • Financial balances

  • Stocks/Investments

  • Vehicles

How the Probate Fee Is Calculated:

[$5 per $1,000 on the first $50,000 of the estate] + [$15 per $1,000 on remaining value]

What To Do After You Inherit A Home?

Before you decide what to do with your inherited property, discuss the issue with your family members and any other person who also has ownership. It's critical to understand all of your options in order to avoid entanglement. There are four steps that you should take after inheriting a property:

Contact your home insurance provider

You will need to ensure that the home remains completely insured when title is transferred to your name. Things like dated electrical wiring may have been insurable on the previous policy, but when a new policy is submitted, they may no longer be insurable unless upgrades are carried out.

Change the locks

When you have been given full title to the home, change the locks. Keys are easily duplicated and may have been distributed amongst family, friends, and acquaintances of the deceased. People who were not named in the will, but who feel as though they are “owed” a share of the estate, including valuables inside the home, may also have keys. If you decide to ultimately sell the inherited property, be sure to remove any valuables.

Get an appraisal

When you take possession of the house, you need to know what the property is worth. This information may help you decide whether or not you choose to keep the property or sell it. Contact a reputable local appraiser to find out its worth.

Maintain the property

You will need to continue to maintain the property, including the interior, exterior, and landscaping. Also, outdated items may need to be repaired, replaced, or refurbished in order to increase the property’s value. Sometimes, these updates can be costly and time consuming, especially for certain things like a kitchen renovation.

Are repairs and updates out of your budget? We purchase properties in as-is condition. Find out more here.

Selling an Inherited Property

If you have come into possession of an inherited property and plan on selling the home, there are a couple of steps you have to take beforehand. First, you will need to meet with at least three realtors to understand their services and decide who may be the best fit.