What Fees Are Involved in Selling a House in Canada?

Selling a house in Canada involves several fees and costs. Here's a breakdown of the most common expenses you can expect:

1. Real Estate Agent Commission

  • Percentage: Typically 3%–7% of the sale price.
  • Details: This is the most significant cost. The commission is usually split between the seller's and buyer's agents, and it is negotiable.

2. Legal Fees

  • Cost: $500–$2,500.
  • Details: A real estate lawyer is required to handle the legal paperwork, including the title transfer and discharge of any existing mortgages.

3. Mortgage Discharge Fees

  • Cost: Varies depending on the lender.
  • Details: If you have an existing mortgage, you may need to pay a discharge fee or penalty. Fixed-rate mortgages often have higher penalties than variable-rate ones.

4. Prepayment Penalty

  • Cost: Could be thousands of dollars.
  • Details: If you're breaking your mortgage before the term ends, you might face a prepayment penalty, calculated as either a percentage of the remaining balance or based on the interest rate differential (IRD).

5. Home Staging and Preparation

  • Cost: $500–$5,000 or more.
  • Details: Includes cleaning, staging, repairs, and renovations to make the property more appealing to buyers.

6. Property Taxes and Utilities

  • Cost: Varies.
  • Details: You'll need to settle any outstanding property taxes and utilities up to the closing date.

7. Moving Costs

  • Cost: $1,000–$5,000.
  • Details: Includes hiring a moving company, packing supplies, and transportation.

8. Capital Gains Tax (if applicable)

  • Cost: Variable.
  • Details: If the property is not your principal residence (e.g., a rental or investment property), you may be subject to capital gains tax on the sale.

9. Other Potential Costs

  • Home Inspection (Optional): $300–$700.
  • Condo Fees: If selling a condo, you might need to provide a status certificate, which costs around $100–$200.
  • Repairs After Buyer Inspection: Depending on what issues arise, you may have to negotiate repairs or price reductions.

Tips to Minimize Costs

  • Negotiate agent commissions.
  • Shop around for legal services and movers.
  • Review mortgage terms for penalties before listing your home.

By budgeting for these expenses, you can avoid surprises and ensure a smoother selling process.