How real estate passes after a person’s death in Ontario is not a single-answer question. The answer depends entirely on how title to the property was held at the time of death. Getting this wrong — in life or in estate planning — can have significant consequences for surviving owners, beneficiaries, and the estate as a whole.
Three Ways to Hold Real Property in Ontario
There are three primary ownership structures for real property in Ontario, and each produces a different outcome on death:
Sole Ownership
When a property is registered in one person’s name alone, that person has exclusive legal title. On death, the property forms part of the estate and is distributed according to the will — or, if there is no will, according to Ontario’s intestacy rules.
To deal with the property — sell it, transfer it, or mortgage it — the estate trustee (executor) will typically need a Certificate of Appointment of Estate Trustee (probate certificate). Banks, title insurance companies, and purchasers require this evidence of the executor’s authority before completing transactions.
Joint Tenancy
Joint tenancy is an ownership structure characterized by the right of survivorship. When one joint tenant dies, their interest in the property automatically passes to the surviving joint tenant(s) — outside the will and outside the estate. The property does not flow through probate. It does not attract estate administration tax. It passes immediately and entirely to the survivor.
To complete the transfer, the surviving joint tenant registers a survivorship application in the land registry, attaching a certified death certificate. This is a relatively simple administrative process.
Joint tenancy is extremely common between spouses and is the default registration for many residential real estate purchases. Its simplicity makes it popular — but its legal implications deserve careful consideration before you assume it is right for your situation.
Tenancy in Common
In a tenancy in common, each co-owner holds a distinct, undivided share of the property. There is no right of survivorship. When one tenant in common dies, their share passes through their estate — by will or by intestacy — not automatically to the other co-owner.
This means a tenant in common’s share is subject to probate, estate administration tax, and distribution to whoever the will (or the intestacy rules) direct. The surviving co-owner does not automatically inherit.
Tenancy in common is common in commercial real estate, investment properties, and situations where co-owners are not spouses and do not want to benefit each other on death.
Severing a Joint Tenancy
A joint tenancy can be converted to a tenancy in common — severed — by one or more of the joint tenants without the consent of the other. Severance changes the ownership structure so that each party holds an undivided share that passes through their estate rather than to the survivor.
Severance is registered in the land registry. Once registered, neither co-owner can reverse it without the other’s cooperation.
Why would someone sever a joint tenancy? Common reasons include:
- Estate planning for blended families — preventing the surviving spouse from inheriting at the expense of children from a prior relationship
- Relationship breakdown — ensuring that if the relationship ends before legal separation, the property does not automatically pass to the estranged partner
- Tax planning — in some circumstances, holding assets as tenants in common rather than joint tenants produces more favorable tax outcomes on death
The Principal Residence Exemption and Estate Transfers
When a property qualifies as a principal residence, the capital gain on disposition is generally sheltered from income tax by the principal residence exemption. On death, a person is deemed to have disposed of all their property at fair market value — which can trigger capital gains.
The principal residence exemption can shelter the gain on a qualifying principal residence. However, the exemption requires designation — and only one property can be designated per family unit per year. For estates with multiple properties (a home and a cottage, for example), designation of one as the principal residence means the other may attract capital gains tax.
This complexity is one reason why real estate and estate planning must be addressed together, not as separate exercises.
Registered vs. Beneficial Ownership
Estate planning sometimes involves arrangements where the registered owner of a property is different from the beneficial owner. For example, a parent may be on title as a registered owner of a child’s home to help them qualify for a mortgage, while the beneficial owner is the child who paid for the home and lives in it.
These arrangements create complications on death. If the parent dies, their share of the registered title may form part of their estate — even though they were not the true beneficial owner. A written trust declaration, signed at the time of purchase, can document the true ownership arrangement and protect against this result.
Final Thoughts
How you hold real property today determines how it passes when you die. Reviewing your title registrations — particularly after major life changes like marriage, separation, the birth of children, or the death of a co-owner — is an important and often overlooked part of estate planning. An experienced real estate and estates lawyer can review your current ownership structure, identify potential problems, and help you make deliberate choices about how you want your real estate to pass.
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Goldstone Law Professional Corporation serves clients across Mississauga, Brampton, Oakville, and the greater GTA in real estate, corporate, estate, and mortgage law. Whether you are buying your first home, structuring a business deal, or planning your estate, our team provides the clear, practical legal guidance you need.
Visit goldstonelawpc.com or call us at 905-595-9917. We are located at 201-186 Robert Speck Parkway, Mississauga, ON L4Z 3G1.
Disclaimer: This article is intended for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please consult a qualified Ontario lawyer.
This article is provided for general information only and does not constitute legal advice. For advice about your specific situation, please contact Goldstone Law PC directly.