The short answer: the big costs are real estate commission plus 13% HST, legal fees, and any mortgage penalty for breaking your mortgage early. Then there are the smaller costs people forget: moving, prep, and closing adjustments. Sellers in Ontario don't pay land transfer tax. That's the buyer's cost.
Most sellers know the sale price they're hoping for. Far fewer know what they'll actually walk away with. Here's every cost, so there are no surprises on closing day.
1. Real estate commission + HST
Commission is negotiable in Ontario. It isn't set by law or by any board. What matters is what you get for it: the pricing strategy, the marketing, the negotiating, and the person managing problems before they become deals that fall apart.
HST of 13% is charged on the commission. Budget for both. Ask any agent you interview to show you the commission and HST as dollar amounts on your expected sale price, not just a percentage.
2. Legal fees
You'll need a real estate lawyer to close. Budget roughly $1,000 to $2,000 including disbursements, though quotes vary. Get one in writing and ask what's included.
3. Breaking your mortgage early
This is the cost that surprises people most, and it can be the largest after commission.
- Variable-rate mortgage: usually three months' interest.
- Fixed-rate mortgage: usually the greater of three months' interest or the interest rate differential (IRD). The IRD can run into five figures.
- Discharge fee: many lenders charge a few hundred dollars to discharge the mortgage.
Call your lender before you list and ask for a written payout and penalty estimate. Also ask whether your mortgage is portable to your next home. Porting can sometimes reduce or avoid the penalty.
4. Getting the home ready
Painting, small repairs, deep cleaning, decluttering, staging and a storage locker. Some of this can return more than it costs. Some of it is wasted money. The right list depends on your home and what buyers in your price range expect.
5. Closing adjustments
On closing, your lawyer balances property taxes and some utilities. If you've prepaid taxes past the closing date, you get money back. If you're behind, it comes off your proceeds.
6. Moving
Movers, packing, and sometimes overlapping costs if your sale and purchase don't close on the same day (see our post on buying first or selling first).
7. Capital gains tax
For most people selling their principal residence, there is no capital gains tax, thanks to the principal residence exemption. If the home was a rental, a second property, or partly used for business, speak with your accountant before you list.
Your net proceeds worksheet
Item | Your number |
|---|---|
Expected sale price | |
– Commission | |
– HST on commission (13%) | |
– Legal fees | |
– Mortgage payout | |
– Mortgage penalty + discharge fee | |
– Prep, staging and moving | |
± Tax and utility adjustments | |
= What you walk away with |
Why this number matters before you decide
Your net proceeds determine your next home: your down payment, your mortgage, and whether you need bridge financing. I build this worksheet with every seller before we set a list price, using your actual mortgage figures and a realistic sale price for your street.
Want your real net number? Book a private home value review and I'll walk you through your estimated proceeds, line by line.
Call or text 905.340.0164 · rickjensen.ca
This post is general information, not legal, tax or mortgage advice. Confirm penalties with your lender, fees with your lawyer, and tax questions with your accountant.
Rick Jensen, Broker · Royal LePage Burloak Real Estate Services, Brokerage. Not intended to solicit buyers or sellers currently under contract.
