Selling inherited Florida property as a Canadian heir

1 What inheriting Florida property means, in 60 seconds

Most Canadians who inherit Florida real estate did not expect to deal with a US legal proceeding. They had perhaps visited the property during snowbird winters, or knew that an aunt, uncle, or parent had bought a condo in Naples, Hollywood, Sarasota, or Cape Coral. The death triggers two parallel processes that the family must run in sequence. The Canadian side handles the decedent's final tax return, the will or intestacy in the province of residence, and any provincial probate fee. The Florida side handles the title transfer through Florida's probate court. Only after the Florida court issues either letters of administration (formal probate) or an order of summary administration (simplified procedure) does the personal representative gain the legal authority to sell the property or transfer the title to the heir.

If you intend to sell rather than keep the property, the workflow has two natural sequencing options. You can sell directly through the estate, where the personal representative signs the deed and FIRPTA applies to the estate (which is itself a foreign person for IRS purposes). Or you can wait for title to be transferred to you personally as the heir, then sell as an individual non-resident seller. The two routes have different paperwork, different cost profiles, and different tax-filing consequences. For most Canadian heirs, selling through the estate is faster and cleaner, because it avoids a second title transfer that itself triggers Florida documentary stamp tax.

This first section frames the rest of the article. The Florida court is in the driver's seat for title. The CRA is in the driver's seat for the deceased's final T1 and the heirs' subsequent reporting. FIRPTA is the IRS at the closing table. Step-up basis is the offset that usually saves heirs from a meaningful US capital gains bill. Everything that follows fits inside that four-actor frame.

2 Probate sequence before the sale can close

Ancillary probate is the supplementary Florida procedure for an estate whose principal probate happens elsewhere, including in a Canadian province. The petitioner is typically the personal representative named in the Canadian will, or, in the case of intestacy, a person entitled under Florida Statutes chapter 733. The petition is filed in the circuit court of the Florida county where the property is situated. Sarasota, Lee, Collier, Pinellas, Broward, and Palm Beach concentrate the bulk of Canadian-owned property and therefore the bulk of Canadian ancillary probate cases.

The formal ancillary administration timeline is typically 6 to 12 months. The court fee for opening the proceeding is USD 401 in most counties as of 2026. The personal representative must publish a Notice to Creditors in a local newspaper, wait three months for creditor claims, prepare an inventory and final accounting, and obtain a closing letter from the clerk. Only after the court approves the inventory and the personal representative is formally authorized by letters of administration can the property be sold. Attorney fees in 2026 range from USD 7,500 to USD 15,000 for a formal ancillary administration on a property worth USD 300,000 to USD 700,000.

Summary administration is a faster alternative. It is available under Florida Statutes § 735.201 when the estate's value (less the value of homestead-exempt property, if any) is USD 75,000 or less, or when more than two years have passed since the date of death. The procedure does not formally appoint a personal representative; instead, the court issues an order of summary administration that directly transfers title to the heirs. The procedure takes 2 to 4 months and costs USD 3,000 to USD 5,500 in total. For a Canadian heir who inherits a small condo with a mortgage that absorbs most of the value, summary administration is often the best option.

The Canadian probate happens in parallel. In Quebec, the will is opened by a notary or by a court order of vérification. In Ontario, the executor obtains a Certificate of Appointment of Estate Trustee. In British Columbia, a Grant of Probate. The Canadian probate documents become the authentication basis for the Florida ancillary proceeding, but each province has its own rule on apostille requirements since Canada joined the Hague Convention on apostille in January 2024. See our complete guide to ancillary probate for the procedural step-by-step.

3 FIRPTA on inherited property, estate sale vs heir sale

If the estate sells the property directly before distribution to the heirs, the estate is treated as a foreign person under IRC § 1445(e) when it has at least one foreign beneficiary. The closing agent withholds 15 percent of the gross sale price, the estate files Form 1041 as a US fiduciary income tax return for the year of sale, and the foreign tax credit flows through to the Canadian beneficiaries via their share of the estate's gain. The estate can apply for a reduced withholding using Form 8288-B filed before closing, on the same basis as a direct sale by a non-resident.

If, instead, the title is first transferred to the Canadian heir under the Florida court order, and then the heir sells, FIRPTA applies to the heir directly as a non-resident seller. The 15 percent withholding is calculated on the gross price the heir receives. The heir files Form 1040-NR for the year of sale, reports the gain on Schedule D and Form 8949, and reconciles the withholding against the actual US tax due. The heir can also file Form 8288-B before closing to reduce the withholding.

Both routes lead to roughly the same end-state tax bill, but the cash-flow drag differs. Selling through the estate avoids the documentary stamp tax that would otherwise apply on a deed transferring title from the personal representative to the heir before the sale, which can save 0.7 percent of the property value in most Florida counties (the standard rate of 0.70 USD per 100 USD of value). Selling after distribution gives the heir direct control over the closing timing, the choice of listing agent, the negotiation, and the use of Form 8288-B in their own name rather than the estate's. For most Canadian heirs with a single property, selling through the estate is cleaner. If multiple heirs disagree about the sale, distributing title first allows each heir to act independently, but it creates fragmentation of the FIRPTA paperwork.

4 Step-up basis at death, and why the US gain is usually small

The step-up rule is one of the most beneficial features of the US tax code for foreign heirs. A Canadian who inherits a Florida property that her parent bought for USD 220,000 in 2010, valued at USD 540,000 at the parent's death in 2026, gets a basis of USD 540,000 for US tax purposes. If she sells in 2026 for USD 560,000, her US capital gain is USD 20,000, not USD 340,000. At the long-term capital-gain rate of 15 percent for a Canadian non-resident in that bracket, the US tax is USD 3,000.

The FIRPTA withholding, at 15 percent of the gross USD 560,000 price, would be USD 84,000 by default. The IRS will refund USD 81,000 once Form 1040-NR is filed, or the heir can file Form 8288-B before closing to reduce the withholding to USD 3,000 upfront. The mechanics are identical to those described in our FIRPTA pillar guide, with one wrinkle: the basis on Form 8288-B is the date-of-death fair market value, not the decedent's original purchase price.

To document the date-of-death fair market value, an independent appraisal is strongly recommended. Florida-licensed appraisers typically charge USD 400 to USD 800 for a residential appraisal. The county property appraiser just-value also serves as a useful corroborating reference for the year of death. For Florida estate-tax purposes (Form 706-NA), the appraisal is required if the estate exceeds USD 60,000 in US-situated assets. The same appraisal then supports the step-up basis for the heir's later Form 1040-NR.

The longer the heir holds before selling, the more appreciation accrues post-death and is therefore taxable. A Canadian heir who keeps the property for ten years before selling will face a regular non-resident long-term capital gain on the post-death appreciation, in addition to any rental-income reporting under Form 1040-NR while she held the property. The tax-planning implication is straightforward: if the family does not plan to use the property, selling within 18 months of death captures the full step-up and minimizes the US-side gain.

5 Canadian side, deemed disposition vs heirs' separate reporting

This is the core difference between the US and Canadian tax treatment of inheritance. In the US, IRC § 1014 grants step-up basis to the heir but does not tax the deceased on the appreciation. In Canada, paragraph 70(5) of the Income Tax Act taxes the deceased on the deemed gain at the moment of death, on the deceased's final T1, and gives the heir a cost base equal to the fair market value at death. The two systems converge on the same heir basis, but the tax timing differs.

For the decedent's executor or notary, the Canadian final T1 must report the Florida property's fair market value at the date of death as the deemed proceeds of disposition. The deemed gain (FMV at death minus original cost) is taxable on the final T1, with 50 percent inclusion. For a Quebec resident who bought a Hollywood condo in 2010 for USD 220,000 (CAD 220,000 historical) and dies in 2026 with the condo valued at USD 540,000 (CAD 740,000 at the 2026 average rate), the deemed gain in CAD is CAD 520,000. At 50 percent inclusion and a marginal rate of 53.3 percent for Quebec, the federal-provincial tax on death is roughly CAD 138,580.

The spousal rollover under paragraph 70(6) of the Income Tax Act can defer this tax if the property passes directly to the surviving spouse. In that case, the deemed disposition happens at the surviving spouse's adjusted cost base (not at fair market value), and the tax falls due only at the surviving spouse's eventual death or sale. For couples with a Florida property, the rollover is often used and pushes the gain forward 5 to 30 years.

For the heir who sells, the Canadian-side gain in the year of sale is calculated as follows. The proceeds of the Florida sale are converted to CAD using the Bank of Canada exchange rate on the date of sale (the actual transaction date, not the year-average). The cost base in CAD is the fair market value at death converted at the date-of-death exchange rate, plus the heir's share of any capital improvements made between death and sale. The difference, if positive, is the heir's capital gain, taxable at 50 percent inclusion on the heir's T1 for the year of sale.

6 Provincial differences across the 10 provinces

Two patterns to note. Ontario's Estate Administration Tax applies to the deceased's worldwide assets, including the Florida property, which means an Ontario probate that includes Florida real estate is more expensive than the equivalent in Alberta or PEI. British Columbia's probate fee similarly tracks worldwide assets. Quebec, by contrast, has no provincial probate fee at the death stage. For Canadians who consider tax-residency planning years in advance, the choice of province of death has measurable estate-fee consequences when a Florida property is in the picture.

The apostille on the Canadian probate document was simplified for all provinces in January 2024 when Canada joined the Hague Convention on apostille. The competent authority is Global Affairs Canada in Ottawa, with delegated provincial offices in Ontario (Ministry of Public and Business Service Delivery), British Columbia (Order in Council Administration Office), Alberta (Service Alberta), Saskatchewan, Manitoba, and the Atlantic provinces (each with its own designated authority). The fee is typically CAD 30 to CAD 100 per document, and turnaround is 5 to 15 business days.

7 Distribution to multiple heirs, the cross-border mechanics

Florida courts can issue an order distributing title in equal or unequal shares according to the will. For example, a will that says "I give my Florida condo to my three children equally" produces a deed by the personal representative that conveys to each child a one-third undivided interest as tenants in common. The three children then hold the property jointly. To sell, all three must sign the listing agreement, the contract, and the closing documents. The closing agent prepares three Form 8288-A statements (one per seller) and withholds FIRPTA at 15 percent of the gross price, allocated pro rata among the three sellers.

Alternatively, the estate can sell the property before distribution and distribute the cash proceeds. The personal representative signs as a single seller, FIRPTA applies once at 15 percent of the gross price, and the net proceeds are deposited in the estate's USD account. The personal representative then distributes the proceeds in USD or converts to CAD before distribution, depending on the heirs' preference. This route is simpler when all heirs agree to sell; it becomes contentious when one heir wants to keep the property.

The exchange rate question becomes important when distribution happens in CAD. If the estate converts USD to CAD on the day of distribution, each heir's Canadian cost base for their share of the property (already established at the date of death) does not change, but their proceeds in CAD are fixed at the distribution-date rate. If the heir later receives the proceeds in USD and converts independently, the heir is exposed to currency fluctuations between the sale date and the conversion date. For three Quebec heirs receiving USD 200,000 each in May 2026 at a rate of CAD 1.37 per USD, conversion at distribution yields CAD 274,000 per heir. If one heir keeps the funds in USD and converts six months later at a higher rate, the heir effectively realizes a foreign-exchange gain that is reportable separately on the heir's T1.

8 Realistic timeline, 6 to 18 months from death to net proceeds

Month 1, the family obtains the death certificate, opens the Canadian probate, and identifies the Florida-licensed attorney who will handle the ancillary administration. Month 2, the Florida attorney files the petition for ancillary administration at the circuit court in the property's county. Month 2 to 5, the court issues the letters of administration and the personal representative publishes the Notice to Creditors. Month 3 to 5, the personal representative gets a date-of-death appraisal from a Florida-licensed appraiser and prepares the inventory.

Month 5 to 7, the personal representative engages a Florida-licensed realtor, prepares the listing, and accepts an offer. Month 8 to 9, the closing happens with FIRPTA withholding at closing. Month 9 to 12, the personal representative files Form 706-NA with the IRS if the estate exceeds USD 60,000 in US-situated assets, files Form 8288-B in advance of closing to reduce FIRPTA withholding if the gain is minimal post step-up, and pays any remaining creditor claims. Month 12 to 14, the personal representative files the final accounting with the Florida court, obtains the closing letter, and distributes the net proceeds to the heirs.

For each heir, the year of distribution is also the year of reporting on the heir's Canadian T1, with the gain (if any, between date of death and date of sale, in CAD) reported on Schedule 3, and the foreign tax credit (if any US tax was paid) applied via Form T2209. The complete Canadian-side reconciliation often spills into the following calendar year, with the T1 due on April 30 of the year after the year of sale.

Speed traps. The most common cause of delay is missing or incomplete Canadian probate documents. The Florida court will not proceed with ancillary administration until the Canadian probate is finalized. If the will is contested in Canada, or if the executor delays the Canadian probate, the Florida process is stuck. Other common delays are HOA estoppel letter turnaround (1 to 4 weeks depending on the association), title insurance underwriting questions on the chain of title, and Form 8288-B IRS processing time (90 days standard) when the heir or estate seeks a reduced FIRPTA withholding.

9 Worked example, three heirs and a USD 800,000 sale

Florida ancillary administration. The Florida-licensed attorney files the petition at the Collier County circuit court in June 2026. Letters of administration are issued in August 2026. The estate engages a Naples-licensed realtor in October 2026 and the property goes under contract in December 2026 for USD 800,000.

FIRPTA at closing (March 2027). Without intervention, the default 15 percent withholding on USD 800,000 is USD 120,000. The personal representative, anticipating the small actual US gain, files Form 8288-B in January 2027. The application shows that the basis at death (USD 750,000) plus capitalized closing costs reduces the effective US gain to roughly USD 35,000, taxed at 15 percent (long-term capital gain rate for non-resident under the Treaty article XIII) is USD 5,250. The IRS issues a withholding certificate in April 2027 reducing the withholding to USD 5,250. The estate receives USD 794,750 net of FIRPTA at closing.

Canadian deemed disposition (deceased's final T1, May 2026). The decedent's executor reports a deemed gain in CAD. The condo's adjusted cost base (USD 245,000 at the 2008 exchange rate of about CAD 1.05 per USD) is CAD 257,250. The fair market value at death (USD 750,000 at May 2026 rate of CAD 1.37) is CAD 1,027,500. The deemed gain is CAD 770,250. With 50 percent inclusion, the taxable capital gain is CAD 385,125. At the Ontario top marginal rate of 53.5 percent, the federal-provincial tax on the death disposition is CAD 206,041. The Ontario Estate Administration Tax on the worldwide estate (CAD 1,027,500 for the Florida portion alone, plus other assets) at 1.5 percent is roughly CAD 15,400 on the Florida portion.

Distribution to heirs (April 2027). The estate's net proceeds, USD 794,750 minus US-side legal fees of about USD 12,500 and closing costs of about USD 30,000 (commission 5 percent, doc stamps 0.70 percent, title insurance, prorations), are USD 752,250. Divided three ways, each heir receives USD 250,750. The personal representative converts to CAD at the distribution-date rate (assume CAD 1.36 per USD in April 2027), giving CAD 341,020 per heir.

Heirs' Canadian T1 for 2027. Each heir reports a capital gain in CAD calculated as their share of (proceeds in CAD) minus (basis at death in CAD). Per heir, proceeds CAD 341,020 (1/3 of CAD 1,023,060) minus basis CAD 342,500 (1/3 of CAD 1,027,500). Net result is a small capital loss of approximately CAD 1,480 per heir on the post-death holding period, which they can offset against other capital gains on their 2027 T1. Each heir's share of the US tax paid by the estate (USD 5,250 / 3 = USD 1,750 = CAD 2,380) flows through the foreign tax credit via Form T2209. The Canadian tax on the heir-level gain is essentially zero.

Summary of cash outcomes per heir. Inheritance pre-tax: USD 266,667 (1/3 of USD 800,000). After Florida sale and FIRPTA: USD 250,750 per heir. After conversion to CAD at distribution: CAD 341,020 per heir. After heir-level Canadian tax on the small post-death gain (zero in this example): CAD 341,020 per heir. The big tax bill (CAD 206,041 federal-provincial on the death-disposition) falls on the deceased's final T1, not on the heirs, and is paid from the estate's other Canadian assets before the heirs' share is calculated.

10 Seven common mistakes Canadian heirs make

Mistake 1, listing the property before letters of administration are issued. A realtor or family member who anticipates the timeline may put the property on the market before the Florida court has issued letters of administration. Any contract signed before that date is voidable, because the personal representative has no legal authority to bind the estate. The mistake costs roughly 60 to 90 days of marketing time wasted.

Mistake 2, skipping the date-of-death appraisal. Without an independent date-of-death appraisal, the personal representative defaults to the county property appraiser's just value, which is often 70 to 85 percent of actual market value. The lower the recorded value, the higher the taxable US gain on a later sale, and the higher the FIRPTA withholding before Form 8288-B intervention. The fee for an appraisal (USD 400 to USD 800) is recovered many times over in tax savings.

Mistake 3, ignoring the Quebec or provincial probate sequencing. The Florida court will not proceed without authenticated Canadian probate documents. If the heirs delay the Canadian probate or rely on a verbal executor appointment without formal proof, the Florida ancillary proceeding is blocked. This can add 90 to 180 days to the timeline.

Mistake 4, not filing Form 8288-B before closing. The default 15 percent FIRPTA withholding ties up cash for 12 to 18 months while the IRS processes the heir's Form 1040-NR refund claim. For an USD 800,000 sale, that is USD 120,000 frozen with the IRS. Form 8288-B, filed at least 90 days before closing with a date-of-death appraisal and a calculation of the actual US gain, reduces the withholding to the actual tax due, often USD 3,000 to USD 8,000 instead of USD 120,000.

Mistake 5, distributing title to multiple heirs before sale. Distributing title first means three or more sets of FIRPTA paperwork, three or more Form 1040-NR filings, and three or more sets of cross-border accountant fees. Selling through the estate keeps the paperwork consolidated and saves USD 2,000 to USD 5,000 in accountant fees collectively.

Mistake 6, forgetting Form 706-NA when the estate exceeds USD 60,000. A US estate-tax return is required for non-resident decedents with US-situated assets above USD 60,000. The return is due nine months after death (extendable). Many Canadian families miss the filing because the Canada-US Treaty article XXIX-B reduces or eliminates the US estate-tax liability for most modest estates, but the return itself is still required, and the IRS will not issue the transfer certificate needed to close the FIRPTA file without it.

Mistake 7, ignoring HOA special assessments. A Florida condominium or planned development may have outstanding special assessments that survive the death of the owner. The estoppel letter from the HOA reveals these obligations at closing. If the personal representative does not request the estoppel letter in time, the closing can be delayed by 2 to 6 weeks, and the heirs may be surprised by USD 5,000 to USD 50,000 of HOA special assessments deducted from the gross proceeds.

11 Checklist for the Canadian heir-seller

1. Month 1. Obtain certified copies of the death certificate from the province of residence. Open Canadian probate (notary in Quebec, court in other provinces). Engage a Florida-licensed probate attorney in the property's county.
2. Month 2. Apply for the apostille on the Canadian probate document at Global Affairs Canada or the provincial competent authority. File the petition for ancillary administration at the Florida circuit court.
3. Month 2 to 3. Obtain a date-of-death appraisal from a Florida-licensed appraiser. Engage a US-side cross-border tax accountant if the estate exceeds USD 60,000 in US-situated assets.
4. Month 3 to 5. Wait for letters of administration. Publish Notice to Creditors. Identify whether to sell through estate or distribute title first.
5. Month 5 to 7. Engage a Florida-licensed realtor. List the property. Accept an offer.
6. Month 7 to 8. File Form 8288-B for reduced FIRPTA withholding (allow 90 days IRS processing). File Form 706-NA for US estate-tax if applicable.
7. Month 8 to 9. Closing. FIRPTA withholding (reduced or default 15 percent) is collected by the closing agent. Net proceeds go to the estate's USD account.
8. Month 9 to 12. Pay remaining creditors. Finalize HOA dues, property taxes, and utilities. Obtain the IRS transfer certificate (after Form 706-NA processing).
9. Month 12 to 14. File the final accounting with the Florida court. Receive the closing letter. Distribute proceeds to heirs in USD or CAD.
10. Month 14 to 18. Each heir files their year-of-sale T1 with Schedule 3 (capital gain or loss) and Form T2209 (foreign tax credit). The deceased's final T1 with the deemed disposition is filed separately.

12 FAQ

Can a single Canadian heir use the entire FIRPTA 0 percent residence-buyer exemption on a small inherited property? The 0 percent exemption applies when the buyer (not the seller) signs an affidavit committing to use the property as a personal residence and the price is USD 300,000 or less. It is buyer-driven, not seller-driven. The heir-seller cannot trigger it unilaterally.

What if the inherited property has a US mortgage at death? The mortgage continues to attach to the property and must be paid off at closing from the gross proceeds. FIRPTA still applies to the gross price, not the net of the mortgage. If the gross price is below the outstanding mortgage balance (rare but possible), the sale is a short sale that requires lender consent.

Can the heirs use the Canadian principal residence exemption? The Canadian principal residence exemption is available only for property that the deceased ordinarily inhabited as their principal residence. For a typical snowbird who kept their Canadian home as principal residence, the Florida property is rarely eligible. Furthermore, the exemption applies to the deceased's final T1, not the heirs' returns.

What if the heirs want to keep the property and not sell? The Florida court order can distribute title to one or all heirs as their inherited share. The heir(s) who keep the property step into the deceased's shoes for future US capital gains (using the step-up basis at death) and for future Canadian capital gains (using the deemed disposition value as their new cost base). Holding costs (HOA, property tax, insurance) continue.

Are there inheritance taxes in Florida? No. Florida abolished its state estate tax in 2005 and does not have an inheritance tax. The only US tax exposure is the federal estate tax via Form 706-NA, which is triggered when US-situated assets exceed USD 60,000 at death.

What if the deceased was a US citizen or green-card holder? The analysis changes substantially. A US citizen or green-card holder is subject to US federal estate tax on worldwide assets, with a USD 13.99 million exemption (2025 figure, indexed annually). The Canadian heirs would still face the Canadian deemed disposition rules under paragraph 70(5), but the FIRPTA withholding does not apply to a US citizen seller. See our guide on Florida probate procedures for the detail.

13 Sources and references

1. Florida Statutes, chapter 733, Probate Code, Administration of Estates. Official text at leg.state.fl.us.
2. Florida Statutes, chapter 734, Ancillary Probate Proceedings. Official text at leg.state.fl.us.
3. Florida Statutes, § 735.201, Summary administration. Official text at leg.state.fl.us.
4. Internal Revenue Code, § 1014, Basis of property acquired from a decedent. Source irs.gov.
5. Internal Revenue Code, § 1445, Withholding of tax on dispositions of United States real property interests. Source irs.gov.
6. 26 CFR § 1.1445-5, Special rules concerning distributions and other transactions by partnerships, trusts, and estates. Source irs.gov.
7. IRS, Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return, Estate of nonresident not a citizen of the United States. Source irs.gov.
8. Canada Revenue Agency, Income Tax Folio S6-F4-C1, Income tax consequences of death of a taxpayer. Source canada.ca/cra.
9. Canada-United States Tax Convention (1980), article XIII (capital gains on real property) and article XXIV (relief from double taxation). Source canada.ca/finance.
10. Canada-United States Tax Convention, article XXIX-B (estate taxation). Source canada.ca/finance.
11. Hague Conference on Private International Law, Apostille Convention, accession of Canada effective January 11, 2024. Source hcch.net.