Costs Taken From Your Sale Proceeds on Completion Day in BC

The sale price on the contract is not the amount that lands in your account. On completion day, several amounts are paid out of the sale money before you receive the balance.

This article lists the usual items a British Columbia seller should plan for, which ones are not yours to pay, and which figures you must confirm from your own documents.

This article covers the law of British Columbia.

The main items that reduce your proceeds

How the final figures are worked out depends on your contract and your situation. Ask early for a draft of the final figures so there are no surprises.

Mortgage payout

If your mortgage is not payable until more than five years after it was made, you may, after five years, pay it off by paying the amount owing plus three months' interest in place of notice, and no further interest is chargeable. This does not apply to mortgages given by corporations or certain prescribed entities.

Before five years, or for mortgages outside that rule, the cost of paying out early depends on your mortgage terms. Ask your lender for a written payout statement for your expected completion date.

Commission and what your listing agreement says

Your listing agreement must state the remuneration and the circumstances in which it is payable. If the listing brokerage shares it with a cooperating brokerage, the breakdown must be specified. When an offer is presented, you must be given a disclosure in dollars of what you pay the listing brokerage, any payment to the buyer's brokerage, the amount the brokerage keeps and other remuneration.

A listing agreement must be in writing unless you waive it, and it must be entered into before the brokerage represents you in offering the property. Any amendment must be in writing and signed by you and an authorized signatory of the brokerage, and you must be given a copy of any written agreement immediately on execution.

Remuneration based on the difference between the listed price and the actual sale price is barred. Ask your accountant or lawyer whether taxes apply on top of the commission amount.

Strata fees and other adjustments

If you sell a strata unit, an owner, purchaser or authorized person can request an information certificate. The strata corporation must provide it within one week, and it must disclose the monthly strata fees payable by the owner. The disclosed information binds the strata corporation for a person who relied on it and acted reasonably.

If your home is tenanted, the sale does not itself end the tenancy. Where a notice to end the tenancy is used, the landlord must pay the tenant one month's rent as compensation on or before the effective date, the notice must be generated through the Residential Tenancy Branch web portal or it is unenforceable, and the tenant has 21 days to dispute it.

Property tax and utility adjustments depend on your contract and the completion date. Your conveyancer will calculate them.

Tax and other costs outside the statement

• Principal residence: report the sale on Schedule 3 of your T1 return, or the CRA will not allow the exemption.
• Late designation: the penalty is the lesser of $8,000 or $100 for each complete month from the original due date to the date of the request.
• Flipping: a property owned fewer than 365 consecutive days is deemed business income, with exceptions for events such as death, relationship breakdown or involuntary job termination.
• Rental use or a business part of the home can limit the exemption.
• A loss on the sale of a home is not deductible because it is personal-use property.
• If you were not a Canadian resident for the whole ownership period, contact the CRA, as the exemption may be reduced or eliminated.

What to do next

• Request a payout statement from your lender for your completion date.
• Re-read the remuneration clause in your listing agreement.
• Ask your conveyancer for a draft statement of adjustments.
• Get the strata information certificate if you own a strata unit.
• Ask an accountant about tax reporting before you sell.

Frequently asked questions