Closing Costs When Selling a Home in Ontario

What Closing Costs Are When You Sell

When you sell a home in Ontario, the sale price is not what lands in your account. Commission (if you used an agent), legal fees, mortgage discharge costs, adjustments, and sometimes tax sit in front of the wire. Those are the seller’s closing costs.

If tenants are still in the house, vacant possession may also mean one month's RTA compensation on an N12, or a voluntary cash-for-keys payment under an N11. Those are not commission. See selling a tenanted home before you budget the file.

A non-resident seller also faces a CRA holdback of 25 percent or 50 percent of the price until a section 116 certificate of compliance is issued. That is not commission and not legal fees.

Buyers usually face a larger cash stack because of land transfer tax—see closing costs when buying. Sellers still need a clear net-proceeds picture before firming up dates on the closing process.

A real estate lawyer in Toronto prepares the closing documents, coordinates with the buyer’s lawyer, pays out the mortgage, and registers the discharge and transfer pieces that belong on the sale file.

Common Seller Closing Costs

Legal Fees and Disbursements

Ontario residential sales run through a lawyer. For a standard sale, all-inclusive real estate legal fees start at $1,999 + HST. That is the legal bill: the lawyer’s fee plus ordinary office disbursements.

It does not include the buyer’s land transfer tax, your real estate commission, or a lender’s discharge/prepayment charges. Prefer all-inclusive quotes so the invoice matches the number you budgeted.

Real Estate Commission

For most listed sales, commission is the largest line. In Ontario it often falls in a 4% to 5% range of the sale price, plus HST, split between listing and cooperating brokerages under the listing agreement—though the exact rate is contractual and negotiable.

On a $750,000 sale, a 5% commission plus HST is $42,375. FSBO and flat-fee MLS arrangements change that math. Commission is not a government fee; it is a brokerage fee you agreed to pay.

Mortgage Discharge and Penalties

If the property is mortgaged, the lender must be paid out and the charge discharged from title. Institutional lenders usually charge an administration/discharge fee. With a private mortgage, discharge fees can be higher and the payout statement needs careful review.

Selling before the mortgage maturity date can also trigger a prepayment penalty (often a rate differential or three months’ interest—your commitment controls). Ask the lender for a payout statement early so it does not surprise you on closing week.

Adjustments on Closing

Property taxes, condo common expenses, and certain utilities are adjusted to the closing date on the Statement of Adjustments. If you prepaid past closing, you typically get a credit from the buyer. If something is in arrears, it comes off your side.

Adjustments are usually smaller than commission, but they still change net proceeds. Your lawyer and the buyer’s lawyer settle the final figures against the APS.

Capital Gains

If the property is your principal residence for the period you owned it, the principal residence exemption often shelters the gain. A rental, cottage, second property, or partial change in use can create taxable capital gains exposure.

This is tax advice territory. Have an accountant model the gain before you set the price and closing date. Your real estate lawyer can flag the conveyancing pieces; the tax return is the accountant’s file.

Example Net-Proceeds Sketch

On a $750,000 Toronto sale with a conventional listing, many sellers sketch commission (plus HST), legal fees from $1,999 + HST, mortgage payout and any penalty, plus or minus adjustments. The exact net depends on your mortgage balance and the listing terms—not a single published percentage.

A common planning band sellers use when commission is in play is roughly 5% to 7% of the sale price all-in. Treat that as a sketch until the payout statement and commission invoice are in hand.

Practical Tips

Commission

• Ask what marketing and negotiating work the rate actually buys.
• Flat-fee MLS and reduced-rate models exist; weigh exposure against savings.
• Get the commission math in writing before you sign the listing agreement.

Legal fees

• Compare all-inclusive quotes, not bare legal fees that exclude disbursements.
• Use the legal fee calculator for a starting estimate.
• Flag title issues early—old charges, estates, and boundary problems delay sales.

Seller closing costs are predictable when you separate commission, the legal bill, the mortgage payout, and tax. Get those four lines on paper before you pick a closing date.

Frequently Asked Questions (FAQ)