Inheritance of Canadian Property Held by USA Resident, All Beneficiaries are also USA Residents

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66 viewsFebruary 11, 2026

0

Jeff Omans (anonymous) Posted February 9, 2026

Hello,
Our mother, Gwen E. Omans, passed away in August 2025. She, a USA resident, owned a cottage property on the north Bruce Peninsula, Ontario. My siblings and I, also all USA residents, are inheriting the property.
All property taxes are paid up to date, and there are no issues with the property. We do not plan to sell, or rent. Therefore, per speaking with other CN accountants, we were told no tax returns need to be filed, and no taxes need to be paid, and no withholding is necessary, until/ unless the property is sold or rented to an outside party. Please confirm this, ASAP. If necessary, we believe we can prove the property was used by our mother as a principal residence, in order to achieve a principal residence exemption, via utility bills, etc.
Second, would you advise us hiring you to file Form TX19 for us to ask for a clearance certificate for the transfer of the property into our names, or should we file it ourselves? If so please provide your fee for preparing the Form TX19, and liaising with the CRA, and anything else we would need you for.
I have the original property deed from 1962, and the 2024 property tax bill.
Third, we have reached out to an appraiser to get the cottage’s fair market value as of the date of our mother’s death. I estimate the value at about $700K. He is seeking clarification as to how the report will be used. (probate, capital gains taxation etc). Can you please provide some clarification on how the report will be used, so he can better understand the assignment?
If you can’t help with these questions, can you provide contact information with anyone who can?
Thank you,
Jeff Omans
Son of Gwen E. Omans

1 Answer

score 0 · Answer 1 · 2026-02-11T15:46:29+00:00

Hi Jeff, sorry for your loss.

A couple of key points to clear up, because the “no filing/no tax unless you sell or rent” answer is often not correct in an estate situation involving Canadian real estate.

1) Canada doesn’t have an “inheritance tax,” but there can be Canadian tax at death
When someone dies owning Canadian real estate, there is generally a deemed disposition at fair market value (FMV) on the date of death, which can create a capital gain and a Canadian tax liability on the deceased’s final return (or the estate’s filings, depending on the reporting). That tax exposure exists even if the beneficiaries do not sell and do not rent.

2) Principal Residence Exemption (PRE): possible, but not automatic
A cottage may qualify for the PRE for some or all years, but it depends on facts (use, other homes owned, which property was designated, residency history, and reporting). Utility bills help support use, but the PRE is ultimately a formal designation/reporting exercise under Canadian rules.

3) If you keep the cottage personally (no rent, no sale), you may still have ongoing compliance to consider

No Canadian income tax return is generally required each year if there is no rental income and no sale.
But please watch the Underused Housing Tax (UHT) rules, which can apply to non-resident / foreign owners of Canadian residential property. Even if an exemption applies, an affected owner may still need to file Form UHT-2900 for the year.
If you ever sell later, a Section 116 compliance certificate process can become relevant for non-residents disposing of Canadian real property.

4) TX19 (Clearance Certificate): recommended for executor protection
A clearance certificate is not always legally mandatory, but it is commonly requested by lawyers/financial institutions and is strongly recommended because it helps protect the legal representative from personal liability after distributing estate assets. The CRA form is TX19.

Our fee (TX19 support): Starting at $750 + HST (plus disbursements if any), which includes preparing the TX19 package, assembling the supporting schedule/checklist of required documents, and liaising with CRA until the clearance certificate is issued. If the file involves additional tax filings (e.g., a final Canadian return with a reported gain), we would quote that separately once we confirm the facts.

5) What the appraisal is used for (what to tell the appraiser)
The FMV appraisal as of the date of death is typically used to:

establish the deemed disposition value for Canadian capital gains reporting (and any PRE analysis),
set the beneficiaries’ / estate’s adjusted cost base going forward (important for any future sale), and
support probate/estate administration values and often U.S. reporting considerations as well.

If you’d like, we can review the residency facts, the cottage history, and whether PRE is available for any years, then map out exactly what filings are needed and what are optional.

Next step: Please email us at amadan@madanca.com (or use the contact form on our site) and we’ll send a short intake list to confirm the key facts and provide a fixed quote for the required filings.

Inheritance of Canadian Property Held by USA Resident, All Beneficiaries are also USA Residents

1 Answer

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