Closing Costs When Selling a House in Ontario

Real estate commission and HST: the largest single line

Commission is the largest single closing cost for almost every seller. In the GTA, 4–5% of sale price plus 13% HST on the commission is typical. On a $1.2M sale at 5%, that’s $60,000 commission + $7,800 HST = $67,800 — about 5.65% all in. On a $750K sale at the same rate, $37,500 + $4,875 = $42,375. See our breakdown of realtor fees in Ontario for the full structure and what’s included.

If you’re comparing brokerages, model the all-in commission at your expected sale price for each proposal and compare net proceeds, not headline rate. A flat-fee brokerage at $5,000 + 2.5% co-op might come in lower than a 4.5% full-service proposal in absolute dollars but deliver materially less marketing reach. The right answer is property-specific.

Legal fees and disbursements

A seller’s real estate lawyer in Ontario typically charges $1,500–$2,500 for legal fees, plus disbursements (title search, courier, software, registration costs) of $300–$700. The lawyer handles preparation of the deed, statements of adjustments, mortgage discharge instructions, trust accounting, and the actual transfer of funds and registration of the new owner on title. They also resolve any title issues that surface during the buyer’s lawyer’s search — which happens more often than first-time sellers expect.

Choose a real estate lawyer the way you’d choose a real estate agent: ask for a fixed quote in writing, confirm what’s included, ask whether they’re available for closing-day issues by phone, and confirm their trust account is in good standing with the Law Society of Ontario.

Mortgage discharge, prepayment penalties, and adjustments

• Discharge fee: $200–$400 paid to your lender to register the mortgage discharge on title.
• Prepayment penalty: if you’re selling mid-term on a closed mortgage, the lender will charge an interest rate differential (IRD) or three months’ interest, whichever is greater. On a $700K mortgage with a rate that’s 1% above current rates and 2.5 years left, an IRD penalty can run $15,000–$25,000+. Get the payout statement early.
• Property tax adjustments: taxes are pro-rated to closing on the statement of adjustments. If you’ve prepaid, the buyer reimburses you for the days they’ll own; if you’re behind, the opposite.
• Utility adjustments: water, gas, hydro, sometimes condo fees — adjusted to closing.
• Lien releases: any HELOCs, builder liens, or judgment liens must be paid off and released. Your lawyer coordinates.

Pre-listing costs: staging, photography, repairs

Pre-listing costs vary widely depending on the home and the listing agent’s standard inclusions. A full-service Toronto listing typically includes professional photography ($500–$1,500), drone or video walk-through ($500–$2,000), and a staging consultation. Full home staging — furnishing an empty home or replacing existing furniture — typically runs $1,500–$5,000+ for a 2-bedroom condo and $4,000–$10,000+ for a detached home, often paid up front and recovered in the sale price.

Repairs and touch-ups are highly variable. A pre-listing inspection ($400–$700) can flag issues you’d rather know about before a buyer’s inspector finds them. Common pre-listing investments: paint ($1,500–$5,000), minor kitchen and bath updates, decluttering and rental storage, landscaping and curb appeal. The marginal return on each is property- and market-specific — our Toronto listing agent page covers what we recommend in advance.

What you don’t pay as a seller

Sellers do not pay Ontario Land Transfer Tax or the Toronto Municipal Land Transfer Tax — those are buyer-side. You generally don’t pay HST on the sale of a resale residential home (HST applies to new construction and substantially renovated homes only). You don’t pay capital gains tax on the sale of your principal residence under the Canadian principal-residence exemption — see our guide on capital gains tax on real estate for the eligibility rules.

You also don’t pay buyer-side legal fees, the buyer’s home inspection, the buyer’s mortgage costs, or the buyer’s moving expenses. The closing statement is split cleanly between the two parties and your lawyer will walk you through every line on the statement of adjustments before you sign at closing. See our buyer-side tax guide for the costs the buyer absorbs.

Frequently Asked Questions

Do I owe HST on the sale of my home?

Generally no on the sale of a used residential property. HST applies to substantially renovated or newly built homes. If you’ve done a major renovation that approached new-build scope, confirm with your lawyer or accountant before listing.

What if my mortgage payout penalty is large?

Ask your lender for the exact payout figure as soon as you’re seriously considering selling. In some cases the new buyer can assume your mortgage; in others, blending and porting to the next property avoids the penalty. Negotiate through a mortgage broker if your lender is unhelpful.

Can I include closing costs in my net proceeds estimate?

Yes — that’s exactly how a good agent prepares it. Estimated sale price minus all closing costs gives you net proceeds. We do this on every free home valuation — reach out if you want one.

Are moving costs deductible?

Sometimes — if you’re moving for work and meet CRA’s eligibility rules (40km closer to your new workplace). Most moves don’t qualify, but it’s worth a check with your accountant.