Advertiser Disclosure

The content on this website includes links to our partners and we may receive compensation when you sign up, at no cost to you. This may impact which products or services we write about and where and how they appear on the site. It does not affect the objectivity of our evaluations or reviews. Read our disclosure.

8 Closing Costs When Selling A Home in Canada

When buying a home in Canada, you need about 3-5% of the home’s value to cover closing costs.

There are also closing costs associated with selling a home.

Learn more about the closing costs for sellers in Ontario, British Columbia, and elsewhere in Canada below.

1. Realtor’s Commissions

The seller is usually responsible for paying the commissions to realtors or real estate agents used by them and the buyer. These commissions can set you back between 3-7% of the selling price of the house.

Average Canadian commissions are around 5% (2.5% goes to the seller’s realtor, and the remainder 2.5% goes to the buyer’s realtor). On a home sold for $450,000, for example, total commissions are $22,500 (using a 5% rate).

You can save on commissions by selling the house yourself and avoiding the services of an agent. However, this comes with its own challenges.

Your real estate lawyer will work with the buyer’s lawyer and other relevant parties (bank, etc.).

They review all legal documentation, prepare a statement of adjustments for taxes or utilities owed or prepaid, review and discharge the title for the property and mortgage, deliver the closing packages and keys to the buyer’s lawyer, and much more.

Legal fees can range anywhere from $500 to $1,500.

3. Closing Adjustments

Your lawyer will prepare a statement of adjustments.

Depending on how you pay your property taxes and utility bills (i.e. prepaid or accrued), you may have to pay what is owed up until the closing day or be due for a refund if you have paid these expenses in advance.

This is generally included in your closing costs when selling a home.

4. Bank Fees

If you have a mortgage and plan to pay it off with the proceeds of your sale before the term ends, you may be subject to prepayment penalties.

Additionally, banks will charge a mortgage discharge fee for discharging the mortgage – anywhere from $250 to $500. If you are porting your mortgage to a new property, you can avoid some of these fees.

Related: Important Questions To Ask Before Buying A Home

5. Costs of Repairs or Replacements

A potential buyer may request that you pay for some repairs (or replacements) in their offer to purchase, counter-offer, or, following the conduction of a home inspection.

Some popular repair requests include:

  • Roof repairs
  • Heating and cooling systems repair (furnace, air conditioners, fans, etc.)
  • Basement leaks
  • Unstable decks
  • Mould removal
  • Upgrading electrical panels, etc.

Of course, you, as the seller, always have the option to decline to pay for repairs or replacements.

6. Home Staging Cost

If you plan to stage your home to make it more appealing to prospective buyers, you will incur additional costs.

7. Moving Costs

Moving your possessions from one house to another will cost you.

Costs would vary depending on how many possessions you have to move, if you’re doing the move yourself or using a moving company, how far your new location is, and so on.

Costs can range from a few bucks to thousands of dollars.

8. Capital Gains Tax

When you sell your principal residence, you’re not required to pay taxes on profits (i.e. capital gains) realized.

However, when this is not the case, capital gains tax is required, and 50% of the profit is taxable.

Closing Costs When Buying a Home in Canada

The infographic below shows the various closing costs incurred when buying a home in Canada.

Closing Costs When Buying A Home

Final Thoughts

It’s a good idea to be prepared for closing costs irrespective of the position you’re taking in a real estate transaction (Buyer or Seller).

This will help you avoid unpleasant surprises!

Also Read:

Are there selling costs missing from the list? Let us know in the comments.

Retirement 101 eBook - 3D


Gravatar for Enoch Omololu, MSc (Econ)
Enoch Omololu, MSc (Econ)

Enoch Omololu is a personal finance expert and a veterinarian. He has a master’s degree in Finance and Investment Management from the University of Aberdeen Business School (Scotland) and has completed several courses and certificates in finance, including the Canadian Securities Course. He also has an MSc. in Agricultural Economics from the University of Manitoba and a Doctor of Veterinary Medicine degree from the University of Ibadan. Enoch is passionate about helping others win with their finances and has been writing about money matters for over a decade. He has been featured or quoted in Forbes, The Globe and Mail, Winnipeg Free Press, Wealthsimple, CBC News, Financial Post, Toronto Star, CTV News, Canadian Securities Exchange, Credit Canada, National Post, and many other personal finance publications. You can learn more about him on the About Page.

His top investment tools include Wealthsimple and Questrade. He earns cash back on purchases using KOHO, monitors his credit score for free using Borrowell, and earns interest on savings through EQ Bank.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.