Selling a Home as an Executor in BC: Probate, Taxes and Timing

If you are the executor of a loved one's estate, selling their home is often the biggest task you take on, and it usually comes at a hard time. Here is how the process works in BC, what has to happen before the sale can complete, and the tax, insurance and timing details that are easy to miss.

The short version

First, check how the home was owned

• Joint tenancy. If the deceased owned the home as a joint tenant, their interest passes to the surviving owner, who applies to the Land Title and Survey Authority (LTSA) with the death certificate. The home doesn't go through the estate, and the survivor sells it as the owner.
• Sole owner or tenant in common. The home, or the deceased's share of it, goes through the estate. The executor needs a grant of probate before the land title office will register a sale.

The title shows which applies. I explain the two kinds of co-ownership in Freehold or Strata? What You Actually Own.

Getting the grant of probate

• Notice first. The executor delivers a notice of the proposed application, with a copy of the will, to the beneficiaries and others who are entitled to it. The application can't be filed until at least 21 days after the notice is delivered.
• The application. It is filed with the BC Supreme Court registry, along with an affidavit listing the estate's assets and liabilities.
• Probate fees. No fee on the first $25,000 of the estate, $6 for every $1,000 or part of $1,000 from $25,000 to $50,000, and $14 for every $1,000 or part of $1,000 over $50,000, plus a $200 filing fee. The fees are paid before the grant is issued. An estate worth $1,000,000 pays $13,450 in probate fees, or $13,650 with the filing fee.

Timing varies from estate to estate, so plan for it to take a few months. BCFSA points out that the grant process can't be sped up because a sale is pending.

Transferring the home to the executor

Once the grant is issued, the home is registered in the executor's name, in their role as executor, before the sale to the buyer can be registered. The application goes to LTSA with a court-certified copy of the grant and of the statement of assets showing the property. No property transfer tax is charged on this step. Your lawyer or notary usually handles it as part of the sale.

Listing before the grant

You can list the home and accept an offer before the grant, but the sale can't complete until the grant is issued and the home is in your name as executor. BCFSA publishes an estate condition for these contracts. It makes the sale subject to the seller providing, by a set date, the grant, confirmation that the home has been registered in the executor's name, and confirmation that everyone entitled to claim under BC's Wills, Estates and Succession Act has waived or released their claims. A companion clause can set completion at the later of a fixed date or five business days after the condition is met. The condition is for both buyer and seller, so neither can waive it alone.

Buyers need to be comfortable with a less certain completion date, so how the timing is explained in the listing and the contract matters. I talk it through with sellers before we list.

If there is a surviving spouse

If there is no will, or the will doesn't dispose of the home, BC's Wills, Estates and Succession Act says the personal representative (the executor, or an administrator if there is no will) can't sell the spousal home in the 180 days after the grant without the surviving spouse's written consent, unless the estate's other assets can't cover its debts. Your lawyer will confirm whether this applies.

Protecting the home while it is empty

• Insurance. Tell the insurer promptly that the owner has died and the home is empty. Under BC's Insurance Act, a change that is material to the risk has to be reported promptly, and an empty home can affect what the policy covers.
• Checks and heat. In the heating season, home policies generally require you to drain the plumbing or have someone check the home regularly when it will be empty for more than four days. Otherwise, the Insurance Bureau of Canada says, freezing damage would likely be excluded.
• Speculation and vacancy tax. In taxable areas like the Tri-Cities, the owners and the executor are exempt for the year of death and the year after, but a declaration is still required by March 31 each year.

Taxes to plan for

• The final return. At death, the deceased is treated as having sold their property at fair market value. A home that was their principal residence can be designated on the final return, using Schedule 3 and Form T1255. Property left to a surviving spouse can generally pass without tax at that point.
• Gains after death. If the estate sells later for more than the value at death, the gain is reported on the estate's T3 return. An appraisal as of the date of death helps your accountant.
• Deadlines. The final return is due April 30 of the following year, or six months after the death if it happened in November or December.
• Clearance certificate. Before distributing the estate, the executor needs a clearance certificate from CRA. Without one, the executor can be personally liable for unpaid tax.
• Flipping rules. A death is an exempt life circumstance under both BC's home flipping tax and the federal flipping rule. For the BC tax, if the home was held for less than 730 days, counting the time the deceased owned it, a return is still needed within 90 days of the sale to claim the exemption.

Your duties to the beneficiaries

An executor has to put the estate's interests ahead of their own and keep a record of everything received and paid. Beneficiaries are entitled to an accounting before the estate is distributed. If you, a beneficiary or a relative want to buy the home, get legal advice before anything is agreed.

Questions executors often ask me

Can an executor sell a house before probate in BC?

You can list it and sign a contract with an estate condition, but the sale can't complete until the grant is issued and the home is transferred into your name as executor.

How long does probate take in BC?

It varies with the estate and the court registry. Plan for a few months, starting with the 21-day notice period before you can apply.

How much are probate fees in BC?

Nothing on the first $25,000, $6 per $1,000 from $25,000 to $50,000, and $14 per $1,000 above $50,000, plus a $200 filing fee. On a $1,000,000 estate, that is $13,450 in probate fees, plus the filing fee.

Does the estate pay capital gains tax on the family home?

If the home qualified as the deceased's principal residence, the gain up to the date of death can usually be sheltered on the final return. If the home rises in value after the death, the gain when the estate sells is reported on the estate's T3 return.

Does an empty estate home pay the speculation and vacancy tax?

Not for the year of death or the following year, but the executor still has to file a declaration for each of those years.

When you are ready, read the BC selling process from listing to completion and my seller's checklist, or request a free home evaluation.

This article is general information, not legal or tax advice. Every estate is different, so work with a lawyer or notary and an accountant. For CRA's guide, see deemed disposition of property.