Sellers I talk to almost always have a number in their head. A sale price. Maybe it’s what the neighbour got, or what an online estimate said last Tuesday. What they don’t have is the second number: the cost of selling a house in Ontario, and what actually lands in their bank account after everyone gets paid. Those two numbers are rarely close.
The Real Costs Nobody Walks You Through
A few years back I worked with a retired couple in Stoney Creek. They’d been quietly carrying two mortgages for nearly a year. They’d bought a smaller bungalow on the mountain side while still holding the old place, figuring it would move fast. By the time we sat down, they hadn’t budgeted for the prepayment penalty on their existing mortgage, or the commission on both sides of the transaction. Nobody had laid the numbers out for them honestly. So they were making decisions based on a version of the transaction that didn’t exist. That’s the conversation I try to have with every seller before they sign anything.
Total selling costs in Ontario generally run between 6% and 8% of the final sale price, before any mortgage penalty. Sellers who don’t plan for it get surprised at the closing table, sometimes right down to the deposit on their next property.
Here’s what makes up your selling costs. Commission is the big one, and HST sits on top of it. Then your lawyer’s fee, the mortgage discharge, adjustments for property taxes and utilities you’ve already prepaid, and whatever staging or repairs the house needs before it goes live. Movers too. None of these are large on their own. Stacked together on a closing statement, they’re the reason a seller’s net comes back lower than the number they had in their head.
If you want to avoid commissions, staging, repairs, and other selling costs, Bloom Homes can make a straightforward cash offer for your Ontario home. You can compare the offer with a traditional sale and see exactly what you could walk away with.
What Is Real Estate Commission and Who Pays It?
Both agents are paid by the seller. Most buyers in Ontario don’t write a cheque to their realtor. The seller’s proceeds cover the commission on both sides. That detail gets glossed over a lot, and it matters to sellers, because it changes your actual takeaway. If you’re pricing off what similar homes sold for, remember the listing number isn’t the number you keep. Buyers feel the cost too, just not directly. It gets folded into the price they agree to pay.
Your lawyer handles the mechanics. Commission comes off the sale proceeds before the balance reaches your account. The total gets split between the listing agent and the buyer’s agent on whatever terms the listing agreement sets. You’ll see the deduction spelled out on the statement of adjustments your lawyer prepares before closing. Ask for that draft early, while there’s still time to question a line you don’t recognize.
One thing I keep seeing: sellers assume the split is fixed. It isn’t. Commissions are negotiable in Ontario, and they vary by region and by brokerage. In a softer market, where buyers have leverage and listings sit longer, a seller has room to ask what their agent will accept on commission. Some hold firm, and that’s fair. Others have room to move, especially when your home shows well, or you’re buying your next place through the same agent.
If you want to avoid traditional commissions, you can also explore a cash offer. Contact us to learn what we can offer for your Ontario property with no pressure and no obligation.
How Much Are Real Estate Commissions in Ontario?
Combined commission in Ontario usually runs between 3.5% and 5% of the sale price. The buyer’s agent typically takes 2.5%, and the listing side takes the rest, anywhere from 1% to 2.5% depending on what you negotiate. Where you land depends on your market, your price point, and how much competition your agent has for the listing. Nothing forces a brokerage to match the rate of the office down the street.
The average resale home price across Ontario was $797,486 in July 2026, down 2.9% from a year earlier. Run that through a 5% commission, and you’re looking at about $39,874 in agent fees before tax. HST adds 13% on top of that. Your lawyer, the mortgage discharge, and any adjustments come out of the same proceeds.
For sale by owner (FSBO) is one way sellers try to cut this cost, and it works for some people. In a slower market, though, a property that’s hard to find and hard to show tends to sit, and a longer time on market has its own costs. You’re the one fielding calls, booking showings, reading offers. Some sellers list on MLS through a flat-fee brokerage and handle the rest themselves, which splits the difference.
Do You Pay Tax on Real Estate Commissions in Ontario?
HST at 13% applies to commission, legal fees, movers, and most other services attached to a closing. So a 5% commission isn’t really 5%. Once the tax lands, it’s 5.65% of your sale price. On a $750,000 sale, that’s $42,375 for the commission alone, which is where a lot of sellers stop reading their net sheet.
For most Canadians, the profit on a primary home is tax-free under the Principal Residence Exemption. You still have to report the sale, though. In the year you sell, the disposition goes on Schedule 3 and the property gets designated on Form T2091(IND). Miss that step and the late-filing penalty runs $100 per month up to a maximum of $8,000, and the Canada Revenue Agency can deny the exemption outright on an otherwise clean sale.
If the place was a rental or an investment property, the exemption doesn’t apply, and a CPA is worth the hour before you list. Half of the capital gain gets added to your income and taxed at your marginal rate. That inclusion rate stayed at one-half after Ottawa cancelled the proposed increase, so the math is what it’s been for years.
What Are Closing Costs for Home Sellers in Ontario?
A seller in Waterdown once asked me why closing costs felt like a second surprise after commission. She’d done the math on agent fees, figured she was ready, then got a lawyer’s statement with four more line items she hadn’t counted. Her home sold in three weeks. The bill still stung.
The main costs are commission at 3.5% to 5% plus 13% HST, legal fees, and the mortgage discharge. Legal work on a straightforward residential sale runs about $1,000 to $2,000 plus HST and disbursements. Your lawyer lines up the payouts, handles the adjustments, and registers the discharge, which is usually the busiest part of closing day. If you’re considering a direct sale, cash home buyers in Hamilton and surrounding Ontario cities may also provide an alternative to the traditional listing process.
A discharge fee is what your lender charges to take their mortgage off your property title. The big banks sit between $260 and $340. Ontario charges another $85 to register the discharge itself. None of that is the prepayment penalty, which is a separate animal.
Prepayment penalties apply when you break your mortgage before the term ends, and this is often the highest single cost in the whole sale. Variable-rate mortgages are usually charged three months’ interest. Fixed-rate mortgages get the greater of three months’ interest or the interest rate differential, and the IRD can run many times higher. Ask your lender for the exact mortgage payout figure before you list.
Property tax adjustments are standard too, and sellers see that line on almost every statement. If you’ve prepaid taxes covering a stretch the buyer will own the place, the buyer pays you back at closing. If you’re behind, the difference comes off your proceeds.
What Does It Cost to Sell a House in Ontario?
Skip this math, and you’re guessing at what it costs to sell a house in Ontario, then making decisions about your next move on a number that doesn’t exist yet. Plenty of sellers do exactly that.
Add it up on a mid-range home. Commission plus HST is the $42,375 figure above. Legal fees add $1,000 to $2,000, and the discharge adds a few hundred more. A prepayment penalty on a fixed-rate mortgage mid-term can run several thousand more. Staging, photography, and pre-listing touch-ups can add $2,500 or more before the first showing. Plan on 6% to 8% of your final sale price all in. Commission is the largest variable in your selling costs. If you’d rather avoid some of these costs, a company that buys homes in Ottawa and other Ontario cities may be worth considering.
The MLS Home Price Index benchmark for Ontario settled at $749,800 in July 2026, down 3.9% from July 2025. In a softening market, selling costs eat a bigger share of whatever gain you have left. Your net can shrink faster than the headline drop suggests.
Carrying costs are the ones sellers forget. Every month the house sits, you’re still paying the mortgage, the property taxes, insurance, and utilities on a place you’ve already mentally left. Add a price cut after a couple of quiet months, and the gap widens again. If you’ve already bought your next home, you’re covering two sets of those bills at once. Run your own numbers before you list, not after.
How to Reduce Your Selling Costs in Ontario
Cutting your selling costs starts before the home hits the market. Good photography and a light staging package, call it $2,500, is money most sellers are glad they spent. I won’t promise you a return multiple, because nobody honestly can. Homes that present well do tend to move faster and hold their price, and speed protects your proceeds. Book the shoot for the hour your windows get the best light. Skip the wide-angle tricks; buyers notice the moment they walk in.
If you’re carrying a variable-rate mortgage, that three-month interest penalty is usually small enough to live with. Sellers with a fixed-rate mortgage mid-term should get the IRD calculation from their lender early, in writing, before signing a listing agreement. Sometimes the number is big enough that waiting for renewal is the better play.
FSBO is a real option too. You’ll still need a lawyer. You may still offer the buyer’s agent a commission to attract represented buyers. Cutting out the listing side saves real money, though. What you’re trading away is time, negotiation experience, and MLS exposure. Sellers who price it wrong on their own watch the savings vanish while the property sits.
A homeowner in Ancaster I spoke with was handling the sale of a parent’s house after a move into assisted living. A traditional listing would have meant a cleanout, fresh paint, and a staging budget the family didn’t have. Every dollar of that prep would have left their pocket months before any closing. That’s the case where the usual cost to sell a house in Ontario stops making sense, and a direct sale starts to make more sense if you need to sell your house fast in Ontario.
Frequently Asked Questions
How Much Tax Do You Pay When You Sell a House in Ontario?
If the home was your principal residence for every year you owned it, you generally won’t owe capital gains tax on the profit. HST applies to the services, including commission and legal fees, though not to the sale price of a resale home itself. You still report the sale to the CRA on Schedule 3 even when the gain is fully exempt. Skip that, and you risk both the penalty and the exemption.
What Percentage Do You Lose When Selling a House in Ontario?
Most sellers give up 6% to 8% of the sale price once commission, HST, legal fees, and discharge costs are totalled. Breaking a fixed-rate mortgage mid-term adds a prepayment penalty on top. That range assumes nothing unusual, no title problems, and no tenant to move out. Running the numbers against your own mortgage and your own listing agreement is the only way to know your real net.
What Are the Average Legal Fees for Selling a House in Ontario?
A standard residential sale in Ontario usually runs $1,000 to $2,000 in legal fees, plus HST and disbursements, covering the legal work and the title transfer. Estate sales and properties with title problems cost more. Legal fees are separate from commission and from any fees your lender charges. Your lawyer takes the fee straight out of your proceeds on closing day, so nothing comes out of pocket ahead of time.
If you’re trying to figure out what a sale would actually put in your pocket, Bloom Homes is happy to work through the numbers with you. No pressure, no obligation. You can reach the team at (289) 402-8086 any time, and if a direct sale makes sense for your situation, we’ll tell you plainly. If it doesn’t, we’ll tell you that too.
