The First Dealings Exemption in Ontario is a unique legal provision that can help certain real estate properties avoid probate fees when passing to beneficiaries.
This exemption applies to land that has undergone conversion from the old Land Registry System (LRS) to the modern Land Titles System (LTS) and has never been transferred under the new system. Understanding whether a property qualifies for this exemption can result in significant estate savings.
Understanding the First Dealings Exemption
Ontario transitioned from the Land Registry System to the Land Titles System to modernize property records. The First Dealings Exemption allows an estate to bypass probate if the property meets the following criteria:
- The property was originally registered under the Land Registry System.
- It was automatically converted to the Land Titles System.
- The property has never been transferred since its conversion.
- The title remains in the name of the original owner who held it before conversion.
For details on Ontario’s land registration systems, visit the Ontario Land Registry Office.
Who Qualifies for the Exemption?
To qualify for the First Dealings Exemption:
- The property must still be in the original owner’s name since conversion.
- The transfer must be to the deceased owner’s heirs as per a will or intestacy laws.
- The estate must provide proof that the property meets all exemption conditions.
If these criteria are met, the estate does not have to apply for probate to transfer ownership to beneficiaries.
For more information on probate in Ontario, visit the Ministry of the Attorney General – Estate Administration.
How to Apply for the First Dealings Exemption
Step 1: Verify Property Eligibility
- Conduct a title search through the Ontario Land Registry Office or consult a real estate lawyer.
- Confirm that the property was converted from Land Registry to Land Titles and has never been transferred.
Step 2: Gather Required Documents
- Death certificate of the property owner.
- Will or proof of intestacy to confirm beneficiaries.
- Affidavit from the executor stating that the property meets the exemption conditions.
Step 3: Submit Transfer Documents
- Complete a Transfer/Deed of Land Form to change ownership to beneficiaries.
- Submit documents to the Land Titles Office without requiring a probate certificate.
For land transfer forms and guidance, visit the ServiceOntario Land Transfer Guide.
When Probate is Still Required
The First Dealings Exemption does not apply in the following cases:
- The property was previously transferred after its conversion to the Land Titles System.
- The deceased owner held the property with someone else as tenants in common.
- The will is contested, or there are disputes among heirs.
- The estate holds other assets requiring probate.
If probate is necessary, executors should review the Ontario Estate Administration Tax rules at the Ontario Court Forms website.
Maximizing Probate Savings with the First Dealings Exemption
Understanding and utilizing the First Dealings Exemption can lead to significant probate savings for eligible estates in Ontario. Property owners and executors should conduct thorough title searches and seek professional legal assistance to confirm eligibility. For further guidance, consult a real estate lawyer or visit the Law Society of Ontario.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified professional for estate planning and property transfer guidance in Ontario.
