Selling a home after someone has died is different from an ordinary sale. Someone needs the legal authority to sell, the estate has tax steps to complete, and the home often hasn’t been lived in for a while. Here’s how estate sales work in British Columbia, for executors and for buyers.
Who can sell
A home owned by the person who died is sold by the estate’s personal representative: the executor named in the will, or an administrator appointed by the court if there’s no will or no executor able to act. BCFSA, the province’s real estate regulator, advises real estate professionals to confirm that authority before taking a listing. It takes the form of a grant of probate (when there’s a will) or a grant of administration.
Until a grant is issued, the executor may not have the legal authority to sign a listing agreement or a contract of purchase and sale. Get advice from an estates lawyer before signing either. When the executor signs, it’s on the estate’s behalf, for example: “G. Seller, Executor of the Estate of [name]”.
A home held in joint tenancy is different: it usually passes directly to the surviving joint owner, without probate.
Why probate affects timing
Title can’t be transferred to a buyer until the grant has been issued and the executor’s authority registered at the Land Title Office, a step called transmission. Probate takes time, and a pending sale doesn’t speed it up. That’s why many estate listings either wait for the grant or use a contract clause making the sale subject to probate, with a completion date that allows for it. Talk to the estate’s lawyer about which approach fits.
Probate fees
BC charges a probate fee on the gross value of the estate’s assets that pass through the will, including the home at its market value:
- nothing on the first $25,000;
- $6 for every $1,000 (or part) from $25,000 to $50,000; and
- $14 for every $1,000 (or part) above $50,000,
plus the court’s filing fees. The fee must be paid before the grant is issued. On a $3,000,000 estate, for example, that’s $150 plus $41,300, or $41,450, before filing fees.
Taxes the executor deals with
- The final return. For tax purposes, the person who died is generally treated as having sold their property at market value just before death. A home that was their principal residence is usually sheltered by the principal residence exemption; a rental or second home may produce a taxable capital gain on the final return.
- The clearance certificate. Before distributing the estate, the executor should get a clearance certificate from the Canada Revenue Agency. Without one, an executor who distributes the assets can be personally liable for unpaid tax, up to the value of what was distributed. Processing can take months, so apply as soon as the returns are assessed.
- BC’s home flipping tax. If the person who died had owned the home for less than two years, a life-circumstance exemption for death may apply; see BC’s home flipping tax, explained.
Disclosure
An executor often knows little about the home’s history, and may sign a “Property No Disclosure Statement” instead of a Property Disclosure Statement for that reason. That doesn’t remove the duty to disclose material latent defects the executor does know about, and the listing agent has their own duty to disclose. Collect what the family knows (renovations, permits, oil tank removal, leaks) and the paperwork that backs it up. See The Property Disclosure Statement.
Getting the home ready
An empty home needs looking after: check that the insurance still covers it while vacant, keep the heat and utilities on, and arrange regular visits. Clearing out decades of belongings takes longer than most families expect. A light clean, minor repairs and simple staging usually return more than a renovation. Executors have a duty to all the beneficiaries, so it’s worth documenting how the price was set, with a proper valuation; see What a real home valuation includes.
If you’re buying an estate home
- Ask whether the grant of probate has been issued. If not, expect a longer completion date and a contract subject to probate.
- Expect an “as is” sale with little disclosure. Make your inspection count, and check the municipality’s permit records; see Reading a home inspection on the North Shore.
- Older, long-held homes on the North Shore may have original systems, an old oil tank, or a lot whose zoning allows more today. All of that belongs in your price.
Questions people ask
Can the executor sell before probate is granted?
The executor may be able to market the home and negotiate, but may not have legal authority to sign a binding contract, and title can’t transfer until the grant is issued and registered. Get legal advice first.
Do the beneficiaries have to agree to the sale?
The executor has the authority to sell, but owes duties to all the beneficiaries, and the will may say how property is to be dealt with. If there’s disagreement, the executor should get legal advice.
Can one of the beneficiaries buy the home?
Often, yes, but it should be at fair market value and handled carefully, with legal advice, so the other beneficiaries are treated fairly.
General information for executors and buyers in British Columbia, current as of publication. It’s not legal or tax advice. Every estate is different; work with an estates lawyer and an accountant.