You’ve accepted an offer on your Ontario home. The buyer’s mortgage is approved. Closing is six weeks away. By now you’ve probably calculated what you’ll net: sale price minus mortgage payoff, right?
That math is incomplete. Between accepted offer and closing cheque, Ontario sellers face a documented sequence of costs that typically reduce net proceeds by 6–8% of the sale price. This article walks through every line item, shows you the order they appear, and works through a real $1M Toronto example so you see exactly where your money goes.
The Headline Number: Commission Plus HST
Real estate commission in Ontario is negotiable, but market standard for residential sales is 4–5% of sale price. This is split: your listing agent receives roughly 2.5%, and the buyer’s agent receives roughly 2.5%. You pay both halves.
Here’s what surprises sellers: HST applies to the full commission amount.
If your home sells for $1,000,000 at 5% commission, that’s $50,000. HST at 13% applies to that $50,000, adding $6,500. Your total commission cost is $56,500.
Many sellers mentally subtract only the 5% figure, then discover on the net sheet that commission is actually $56,500. The HST component is legally required and non-negotiable in Ontario.
At $2M, the math worsens: $100,000 in commission plus $13,000 in HST equals $113,000 out of pocket.
Commission is typically the single largest cost. It reduces your net proceeds more than all other closing costs combined.
Legal Fees and Mortgage Discharge
Ontario real estate law requires a licensed lawyer to close the transaction. You hire this lawyer (your agent may recommend one, but you choose). Their fee is typically $1,500–$2,500 for a standard residential closing.
What does this cover? The lawyer reviews the purchase agreement, searches title, orders a title insurance policy, conducts the closing call with the buyer’s lawyer, arranges mortgage discharge, prepares your deed, and handles all document registration with Land Titles Ontario.
Some lawyers quote a flat fee that includes basic title insurance. Others bill title insurance separately at $200–$400. Ask upfront whether your quote is all-in.
Mortgage discharge is a separate but related cost. If you’re carrying a mortgage at closing, your lender charges $200–$300 to discharge the mortgage from the sale proceeds. If you’re switching between institutions (e.g., refinancing your next purchase with a different lender), this fee applies. If your new purchase is with the same lender, they sometimes waive it—always confirm in writing.
Total legal and discharge costs typically range from $1,700 to $2,800.
Statement of Adjustments: Prorated Costs and Credits
On closing day, the lawyer prepares a statement of adjustments. This divides costs and credits between seller and buyer based on the closing date.
Property tax adjustments. If you’ve paid property tax for the full year and are closing on July 15, you’re owed a credit for the months from July 15 onward. The buyer reimburses you at closing. Conversely, if property tax isn’t yet paid, you may owe the buyer an adjustment for the period you owned the home.
Utility and condo fee adjustments. Hydro, natural gas, and water are prorated to the closing date. If you’ve prepaid, you receive a credit. Condo owners: condo fees are prorated, and the buyer assumes fees from closing forward.
Prepaid heating oil, propane, or service plans. If you’ve prepaid for a service plan or filled the oil tank, you receive credit for the unused portion.
These adjustments usually net to small credits in your favour (a few hundred dollars), but they vary by closing date, season, and property type. Your lawyer calculates these precisely; you don’t control them, but they appear on the net sheet.
Condo-Specific Costs: Status Certificate
If you’re selling a condo, the buyer’s lender requires a status certificate from the condo corporation. This certificate shows reserve fund status, unit fees, and any special assessments. The fee is $100–$150 and is customarily paid by the seller in Ontario.
Your condo corporation prepares this; your lawyer requests it. This fee appears on the net sheet under “status certificate.”
The Costs Nobody Plans For: Bridge Financing, Inspection Repairs, and Moving
Bridge financing. If you’re selling one home and buying another simultaneously, you may need bridge financing to cover the down payment on your new purchase before your current home’s closing cheque arrives. Bridge loans are expensive: prime plus 2–4% per annum, calculated daily for the bridge period. A $500,000 bridge for 30 days at prime + 3% can cost $4,000–$5,000. This isn’t a hidden cost (your new lender quotes it), but many sellers forget to budget it.
Inspection repair costs. The purchase agreement often includes conditions for a home inspection. If significant issues arise, you may negotiate repairs. Unlike closing costs, repair costs are variable—ranging from $0 (no issues) to $15,000 (foundation repairs, roof replacement, or major system upgrades). These are paid from proceeds before the closing cheque is cut.
Moving costs. Professional movers in Ontario typically charge $1,500–$5,000 depending on distance and volume. This isn’t a closing cost in the technical sense, but it’s paid from proceeds around closing time.
Detailed Worked Example: $1,000,000 Toronto Detached Home
Sale price: $1,000,000
Commission calculation:
– Commission at 5%: $50,000
– HST on commission at 13%: $6,500
– Total commission: -$56,500
Legal and discharge:
– Lawyer fee (flat rate, title insurance included): -$2,000
– Mortgage discharge fee: -$250
– Subtotal: -$2,250
Adjustments (sample):
– Property tax adjustment (seller credit): +$800
– Condo fee (not applicable): $0
– Prepaid utilities (seller credit): +$150
– Subtotal: +$950
Inspection repairs (negotiated): -$4,000
Total costs and adjustments: -$56,500 – $2,250 – $4,000 + $950 = -$61,800
Gross proceeds before mortgage payoff: $1,000,000 – $61,800 = $938,200
Mortgage payoff (example: $750,000 outstanding at closing): -$750,000
Net to seller (before moving costs): $188,200
This seller nets $188,200 in cash at closing, after all Ontario closing costs, commission with HST, and mortgage discharge. The 6.18% reduction ($61,800 on $1M) is typical for Ontario residential sales.
Timeline: When Costs Hit the Net Sheet
Understanding the cash flow timeline helps you plan:
Accepted offer to 30 days before closing: Home inspection negotiation happens here. Repair costs are determined and deducted from proceeds.
14 days before closing: Your lawyer confirms legal fees and orders title insurance. Mortgage lender confirms discharge fee amount.
Closing day: Your lawyer calculates the statement of adjustments, deducts all costs, and confirms net proceeds with the buyer’s lawyer in the closing call.
After closing call: Your lawyer receives the buyer’s funds and your mortgage lender’s discharge authorization. All costs are deducted from the buyer’s cheque. Your net proceeds are wired or mailed to you, typically within 1–3 business days.
You don’t see itemized costs until the net sheet arrives, usually 3–5 days before closing. If you’re buying another home with a same-day closing (bridge financing scenario), confirm with your new lender that the timing aligns.
Planning Your Cash Flow: The Net Sheet Calculator
The Ontario real estate market moves fast. By the time you see the net sheet, closing is days away—too late to renegotiate commission or dispute a mortgage discharge fee. The time to plan is before you list.
Use an online net sheet calculator to model your proceeds at different sale prices. Input your estimated commission (discuss with your agent), your mortgage balance, and property tax adjustments. See the range of possible net proceeds.
If you’re upsizing or buying a second property, factor in capital gains tax if applicable (principal residence exemption usually applies, but confirm with an accountant). If you’re buying simultaneously, budget bridge financing explicitly.
Many sellers underestimate closing costs by 2–3% of sale price because they focus only on commission and forget HST, legal fees, and adjustments. Use a calculator or book a consultation with an Ontario real estate lawyer to confirm your numbers before listing.
Key Takeaways for Ontario Sellers
Commission with HST is your largest single cost, typically 5.5–6.5% of sale price. Legal fees and mortgage discharge add another 0.2–0.3%. Property tax and utility adjustments can swing your net proceeds by a few hundred dollars, either direction. Inspection repairs and bridge financing, if applicable, are variable but can be substantial.
On a $1M sale, expect to pay $56,500–$63,000 in closing costs before mortgage payoff. On a $2M sale, that rises to $113,000–$126,000. These are real numbers; plan accordingly, and don’t be surprised when the net sheet arrives.
Your Ontario real estate lawyer is your partner in this process. They calculate every adjustment precisely and ensure no cost is missed. Work with them early, model your proceeds with a net sheet calculator, and you’ll close with confidence.
Frequently asked questions
Yes. HST at 13% is legally required on the full real estate commission in Ontario. This is not negotiable and is set by federal tax law. Many sellers overlook this and underestimate their true commission cost by roughly 13%. Commission at 5% plus HST brings the total to 5.65% of sale price.
Yes, commission is entirely negotiable in Ontario. The standard is 4–5% (2.5% + 2.5% split), but you can offer 3.5% or even 3% if you’re in a strong seller’s market. However, offering below-market commission may reduce buyer’s agent motivation to show your home. Discuss this carefully with your listing agent and understand the trade-offs.
Yes. You pay closing costs (commission, legal, adjustments) on the sale, and you pay legal fees, land transfer tax, title insurance, and other costs on the purchase. The two transactions are separate, even if closing on the same day. Budget for both. If your sale closing is later than your purchase closing, you’ll also need bridge financing.
In Ontario, the seller typically pays both the listing agent and the buyer’s agent through the commission split. This is market convention; the buyer doesn’t usually negotiate a separate commission with their agent. The listing agreement you sign specifies this commission split, so you control it only through negotiation before listing.
A statement of adjustments is a document your lawyer prepares that prorates property tax, utilities, condo fees, and other costs between you and the buyer based on the closing date. You typically see it 2–3 days before closing. It can shift proceeds by a few hundred dollars, either in your favour or the buyer’s, depending on the time of year and property type.
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 | Alex GoodmanSales Representative · RE/MAX Your Community Realty, Brokerage Alex Goodman is a Sales Representative with RE/MAX Your Community Realty, Brokerage, serving the Greater Toronto Area. He specializes in residential sales across Ontario — luxury, first-time buyer, and downsizing transactions — and maintains InstantCalculator.ca as a free public resource for Ontario homeowners researching their property value. |