Sellers in Ontario should plan for closing costs of roughly 5–7% of the sale price, with the realtor commission as the single largest item. Unlike buying, sellers do not pay Land Transfer Tax — that is a buyer cost. But you do pay your real estate lawyer, mortgage discharge fees and any pre-payment penalty, possible capital gains tax (if not your principal residence), and final utility/property tax adjustments at closing.
In this guide, we cross-reference Ontario Realtor Fees, Calculate Realtor Fees, Capital Gains Tax, and Sales Tax When Buying — click through whenever you want to go deeper on a related concept.
1. Real Estate Commission (Largest Cost)
Typically 4–5% of the sale price plus 13% HST. On a $1,000,000 Toronto sale, this is roughly $45,000–$56,500.
2. Real Estate Lawyer
Ontario law requires a real estate lawyer to close the transaction. Budget $1,500–$2,500 for legal fees plus disbursements (title insurance refund, courier, registration). Your lawyer prepares the Statement of Adjustments, holds funds in trust, discharges your mortgage, and registers the transfer.
3. Mortgage Discharge and Pre-Payment Penalty
If you have a mortgage, your lender charges a discharge fee ($200–$400). If you are breaking a fixed-term mortgage early, the pre-payment penalty can be substantial — request a payout statement from your lender at least two weeks before closing.
4. Capital Gains Tax (Investment / Secondary Properties Only)
If the property is not your principal residence, you owe capital gains tax on the gain. Ontario uses the federal inclusion rate. Speak to an accountant to plan for this — it can be five or six figures on a long-held GTA investment property.
5. Property Tax and Utility Adjustments
On the Statement of Adjustments your lawyer credits or charges you for prepaid property taxes, utilities, and condo fees. On a Toronto detached home with property taxes around $5,000–$7,000/year, this can add or subtract a few hundred dollars depending on your closing date.
6. Optional Costs
- Staging: $1,500–$5,000 depending on size.
- Pre-list painting and repairs.
- Professional cleaning before closing.
- Moving costs.
Worked Example — $1,200,000 Toronto Sale
| Item | Estimated Cost |
|---|---|
| Realtor commission @ 5% + HST | ~$67,800 |
| Lawyer + disbursements | ~$2,000 |
| Mortgage discharge fee | ~$300 |
| Property tax / utility adjustments | ~$500 |
| Total estimated closing costs | ~$70,600 |
| Net proceeds (before any mortgage payoff) | ~$1,129,400 |
Frequently Asked Questions
Do sellers pay Land Transfer Tax in Ontario?+
No. Ontario Land Transfer Tax (and Toronto's additional Municipal Land Transfer Tax) are paid by the buyer at closing. Sellers do not pay LTT.
Do I need a real estate lawyer to sell in Ontario?+
Yes. Ontario requires a real estate lawyer to close the transaction — register the discharge of your mortgage, prepare the Statement of Adjustments, and transfer title.
Will I pay capital gains tax on my home sale?+
Not if it has been your principal residence for the entire ownership period — that is exempt under the Principal Residence Exemption. Investment, recreational, and secondary properties are taxable.
How much should I budget total?+
Plan for 5–7% of the sale price in closing costs, plus any mortgage payoff. Get a personalized net-sheet from your agent and lawyer before listing.
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