SELELRS · THE TIMING QUESTION

How Much Does It Actually Cost to Sell a Property in Toronto?

A complete breakdown of real estate selling expenses so you know what to expect and how muhc you can walk away with.

Quick Takeaways

✔ Commission is negotiable - there is no fixed rate in Ontario.

✔ To sell I charge 5%+HST, split equally with the buyer’s brokerage.

✔ Budget for legal fees, mortgage costs, and property preparation.

✔ Land transfer tax is paid by the buyer, not the seller expense

✔ Your net proceeds depend on your sale price, selling costs, and mortgage balance.

Selling your home can be a significant financial transaction. While most homeowners focus on how much their property is worth, an equally important question is: How much will it actually cost to sell, and how much money will I walk away with?

The sale price is only part of the equation. Between real estate commission, HST, legal fees, mortgage discharge costs, potential prepayment penalties and getting your property ready for market, there are several expenses worth understanding before you list.

The good news is that most of these costs can be identified in advance. With a little planning, you can have a much clearer picture of your expected net proceeds before putting your property on the market.

Let's break down the costs of selling a property in Toronto.

The Main Costs of Selling A Property

These are the major expenses involved in selling a property that you should be aware of.

Real estate commission

Commission is the compensation paid to the real estate brokerages involved in the transaction for representing the seller and the buyer's brokerage.

Real estate commission rates are negotiable. There is no government-mandated or RECO-approved commission rate in Ontario.

Commission can be structured in several ways:

A percentage of the final sale price.
A fixed dollar amount.
A combination of a percentage and a fixed fee.

The amount you agree to pay, the services included, and any compensation offered to the buyer's brokerage should all be clearly outlined in your listing agreement.

What Do I Charge?

If you choose to work with me, my commission is 5% of the final sale price plus HST, split equally between the listing brokerage and the buyer's brokerage.

Preparing Your Property for Sale

First impressions matter. Before your property goes on the market, you may want to invest in some preparation to make it more appealing to potential buyers.

Depending on the property's condition, this could include:

Repairs and renovations.
Professional cleaning.
Decluttering and organizing.
Painting and minor repairs.
Landscaping and exterior maintenance.
Furniture rental and staging.
Professional photography and video.

In many cases, relatively inexpensive improvements can make a meaningful difference in how a property is presented in order to attractive the most potential buyers possible.

I work with sellers to develop a preparation strategy that makes sense for their property, budget and target market.

Legal fees & disbursements

Every real estate transaction requires legal work to transfer ownership and ensure the sale closes properly.

Your real estate lawyer typically handles:

Reviewing the Agreement of Purchase and Sale.
Preparing the necessary closing documentation.
Obtaining your mortgage payout statement.
Arranging for the mortgage to be discharged from title.
Calculating property tax and closing adjustments.
Receiving the sale proceeds and distributing the funds.

Legal fees vary depending on the lawyer, the complexity of the transaction and the work required. Disbursements and applicable HST may also be charged.

Closing Adjustments & Other Expenses

When a property changes ownership, certain expenses may need to be adjusted between the buyer and seller. Your lawyer will calculate these as part of the closing process.

Potential adjustments can include:

Prepaid property taxes.
Prepaid condominium maintenance fees.
Prepaid utilities or other services.
Rental equipment or contracts.
Other expenses specified in the Agreement of Purchase and Sale.

If you're selling a condominium, check with your property management company about any building-specific move-out fees, elevator deposits or other requirements.

Mortgage Discharge Fees and Prepayment Penalties

If you still have a mortgage on your property, it will need to be paid out when you sell. There are two separate expenses to understand:

1) Mortgage discharge fee

Your lender may charge a fee to discharge its mortgage from the property's title. Your lawyer will generally coordinate this process as part of closing.

2) Mortgage prepayment penalty

If you're selling before the end of your mortgage term, your lender may charge a penalty for paying off the mortgage early. Depending on your mortgage agreement, the penalty may be calculated using three months' interest or an Interest Rate Differential (IRD) - for some homeowners, this can be thousands of dollars.

Before listing, contact your lender and request a mortgage payout statement that includes any applicable prepayment penalty.

If you're purchasing another property, also ask whether your mortgage is portable. Transferring an existing mortgage to a new property may help you avoid certain penalties, depending on your lender's terms and approval.

Moving Expenses

Moving costs are easy to overlook and depending on your circumstances, you may need to budget for:

Professional movers.
Packing supplies and storage.
Temporary accommodation.
Cleaning services.
Utility disconnections and connections.
Moving insurance.

If you're purchasing another property, you'll also have the costs associated with moving into your new home.

These expenses can vary considerably depending on the distance, size of your home and how much assistance you require

Cost Breakdown of Selling a $1,000,000 Toronto Property

SELLER FREQUENTLY ASKED QUESTIONS

Common Questions I Get

Direct answers to the questions I hear every day from sellers.

Q. How Much Commission Do I Charge To Sell a Property?

ANSWER

If you would like to work with me, I charge 5% of the sale price + HST, which is split 50/50 with the buyer’s brokerage. Selling a property involves considerably more than putting a sign on the lawn and uploading a listing to MLS®. My commission covers the professional services, expertise, marketing strategy and transaction management required to take your property from initial preparation through to a successful closing.

Click here for more details about what you get for a 5% commission

Q. Will You Have to Pay Capital Gains Tax?

ANSWER

This is an important consideration, particularly if you're selling an investment property.

If the property is your principal residence, you will generally not have to pay capital gains tax if it qualifies for the principal residence exemption for all the relevant years of ownership. However, the sale still needs to be reported to the CRA.

If you're selling a rental property, investment property, or a home that was only partially used as your principal residence, you may have a taxable capital gain or business income.

There are also specific tax rules for properties bought and sold within a short period.

Your tax situation depends on how the property was used, how long you owned it, and other circumstances. I recommend speaking with an accountant before selling if there is any possibility of a taxable gain.

Q. Do Sellers Pay Land Transfer Tax in Toronto?

ANSWER

This is a common question, especially because Toronto buyers face both provincial and municipal land transfer taxes.

Generally, land transfer tax is a buyer's expense, not a seller's expense. These taxes are payable when the property is acquired and the transfer is registered.

Let's Figure Out What You Would Actually Walk Away With

I can help you estimate your property's current market value, review the likely selling expenses and calculate how much equity you could realistically walk away with, so there are no unnecessary surprises along the way.

Let's meet virtually or for a coffee — my treat!

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