In Ontario, you can draft a “Right of First Refusal” clause in your Will to give one specific child the option to buy the family home at fair market value before it is listed publicly. This strategy prevents sibling resentment and keeps the property in the family without cheating other beneficiaries out of their inheritance.
The family home is often the most valuable and emotionally charged asset in an Ontario estate. 💔 When parents pass away, it is common for one child to want to keep the house to raise their own family, while the other siblings simply want their share of the cash. If the Will simply states “divide everything equally,” the Estate Trustee is usually forced to sell the house on the open market, causing severe family friction and heartbreak.
To prevent this, savvy testators use a “Right of First Refusal” (ROFR) or an “Option to Purchase” clause in their Will. 🔍 This legal mechanism grants a designated beneficiary the exclusive right to buy the property from the estate before it is listed with a real estate agent. As of May 2026, proper drafting is critical. If you live in high-value real estate markets like Brampton, Markham, or Vaughan, the clause must establish a bulletproof method for determining the home’s value so that no sibling feels financially cheated.
Step-by-Step Process for Drafting an Option to Purchase in Ontario
Creating a fair and legally binding ROFR requires careful planning. 📂 You cannot simply state, “let John buy the house if he wants it.” The clause must function like a strict real estate contract embedded within your Will. Follow these steps with your estate lawyer to ensure a smooth transfer.
Step 1: Discuss the Idea with Your Family
Before putting pen to paper, have an open conversation with your children. 👨 Find out if any of them actually have the desire and financial capacity to qualify for a mortgage to buy the home. Surprising them with this clause after your passing can cause unnecessary delays if the designated child is unsure if they want the property.
Step 2: Define the Valuation Method
The most crucial step is establishing how the “Fair Market Value” will be calculated. 📝 Your Will should explicitly instruct the Estate Trustee to hire one, or preferably two, independent, certified real estate appraisers. The clause should state that the purchase price will be the average of the two appraisals. This removes any accusations of favouritism and prevents the purchasing sibling from demanding a “family discount.”
Step 3: Establish Strict Timelines
You must prevent the purchasing child from dragging their feet and holding the estate hostage. 🕐 The Will must include strict deadlines. For example, the clause should give the child 60 days from the date of the formal appraisal to provide written notice of their intent to buy. They should then be given a maximum of 90 days to secure financing and close the sale.
Step 4: Handle the Equalization of Proceeds
When the child buys the house, they do not necessarily hand over a massive cheque for the full amount. 💰 Often, their own share of the inheritance is used as a credit toward the purchase price. Your lawyer must draft the equalization clause carefully so the purchasing child only needs to secure a mortgage for the portion that belongs to their siblings.
How Much Does it Cost in Ontario?
Transferring property through an estate involves unavoidable legal and government fees. 💸 The Will should clarify whether the estate or the purchasing child is responsible for paying these closing costs.
| Service / Tax Expense | Estimated Cost in CAD |
|---|---|
| Certified Property Appraisal | $400 – $800+ per appraisal |
| Drafting a Complex Will with ROFR | $1,000 – $2,500 |
| Ontario Land Transfer Tax | Depends on property value (Paid by the buyer) |
| Real Estate Lawyer (Closing Fees) | $1,200 – $2,500 (Split between estate and buyer) |
How Long Does the Process Take?
An Option to Purchase adds a slight delay to settling the estate, but it is faster than a standard public listing. 📅 After the Estate Trustee obtains the Certificate of Appointment (Probate), getting the formal appraisals takes about 2 to 4 weeks. The designated child then typically has 30 to 90 days to exercise their option and close the transaction. If they fail to meet the deadline, the property is listed publicly, which can take an additional 3 to 6 months to sell.
Frequently Asked Questions (FAQ)
Does the purchasing child have to pay Land Transfer Tax?
Yes. If a beneficiary buys the house from the estate (even if using their inheritance as a credit), they are completing a real estate transaction and must generally pay Ontario Land Transfer Tax on the value of the portion they are purchasing from their siblings.
Can I let my child buy the house at a massive discount?
You can legally instruct that the home be sold to a child for less than market value. However, you must explicitly state this in the Will. Be aware that doing so dramatically reduces the inheritance of your other children, which often triggers bitter family lawsuits.
What happens to the mortgage if the child buys it?
The child purchasing the home must secure their own mortgage financing from a bank to buy out the siblings and pay off any existing mortgage left by the deceased. They generally cannot simply take over your old mortgage rate.
What if multiple children want the house?
If you anticipate multiple children wanting the property, your Will can direct the Estate Trustee to hold a private, closed auction among the siblings. The sibling willing to pay the highest price secures the property, maximizing the estate’s overall value.
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