How much does it cost to sell a house in Ontario, and what comes out of your proceeds?

The cost of selling a house in Ontario depends on your mortgage, your realtor agreement and the choices you make, but the main items are legal fees, a mortgage discharge fee and realtor commission. Commission is typically 2% to 6% of the sale price and is negotiable.

HST at 13% applies to commission because it is a service related to Ontario real property. Other costs can include mortgage prepayment penalties, moving costs, staging fees, repairs and cleaning. A prepayment penalty is usually the higher of three months' interest on the outstanding balance or the interest rate differential. In one federal example, a $200,000 mortgage at 6% with 36 months left had three months' interest of $3,000 and an interest rate differential of $12,000.

To estimate your net proceeds, start with the sale price and subtract your mortgage payout, any penalty, commission with HST, legal fees and your other costs. Your mortgage contract and lender set the penalty and discharge fee. If you sell a home you owned for less than 365 consecutive days, the profit is generally business income unless a listed life event applies. Confirm the full picture with a lawyer or accountant.