Did you know your that your client’s home may qualify for a “senior’s discount?”
A First Dealings exemption applies to many homes purchased in Ontario in the ’90s and early 2000s, and is a means of avoiding probate tax on a primary residence.
This ‘discount’ of sorts has nothing to do with the age of the homeowner, or even the age of the home, but is a lingering trace of the digitization of property records that began in 1997.
When the government of Ontario began registering land titles electronically, it assigned every property a PIN that would be used to file information regarding land transfers and transactions.
While almost all properties currently have an associated PIN, homeowners who purchased their properties prior to the creation of their land’s PIN own properties that are considered “first dealings” properties: this means that the land has not been sold since the time it was electronically registered.
First dealings properties qualify for a probate tax exemption, which is facilitated through the creation of a secondary will.
Clients who have secondary wills created can save money by separating their assets into those that will be subject to probate tax (in the primary will), and those that can avoid probate tax (in the secondary will).
To know whether your client’s property qualifies as a first dealings property consult Teraview, the online land registry database. If your client purchased the home prior to the creation of the property’s PIN and will still be an owner at the time of death, the property is a first dealings property. The addition of a joint owner or inheritance through survivorship will not nullify this exemption, but if a new owner purchases the home after the PIN has been created the exemption will not carry over.
First dealings exemptions are an important consideration for estate planning. Those who qualify can save big on probate tax by creating a secondary will.
