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Home Sellers Expenses

Selling a home involves careful planning, a well thought-out strategy, and business savvy. To help inform you of what to expect, I have compiled a list of information on the varying costs that you will likely encounter when you decide to sell your home.

Commissions

The Competition Act is federal legislation that states there is no set or standard commission rate that is charged by a Real Estate Company.  You as the seller, is obligated to pay a commission predetermined in the Listing Contract for the successful sale of your home which is subjected to the Harmonized Sales Tax (HST) of 12%.  Commissions are typically calculated and shown in the following examples.


7% charged on your First $100,000 and 2.95% charged on the Remainder.
   
  • $300,000 would be $12,900 plus HST
  • $400,000 would be $15,850 plus HST
  • $500,000 would be $18,800 plus HST
  • $600,000 would be $21,750 plus HST
  • $700,000 would be $24,700 plus HST
  • $800,000 would be $27,650 plus HST
  • $900,000 would be $30,600 plus HST
  • $1,000,000 would be $33,550 plus HST
  • $1,500,000 would be $48,300 plus HST
  • $2,000,000 would be $63,050 plus HST
  • $3,000,000 would be $92,550 plus HST
  • $4,000,000 would be $122,050 plus HST
  • $5,000,000 would be $151,550 plus HST
Keep in mind the total commission paid is typically split between the real estate professionals representing the seller and the buyer.

Adjustments

Adjustment costs is any prepaid costs paid by the seller that needs to be reimbursed when the buyer takes possession of the home. Adjustment costs may include property taxes, utilities, strata fees and service contracts.  The date of adjustment will be predetermined in the Contract of Purchase & Sale.

In most cases, the buyer credits the seller for these costs on the adjustment date. In some instances, you may have to reimburse the buyer for any unpaid expenses the buyer has agreed to oversee.

Capital Gains Tax

If the property that you are selling is your primary residence it is not subjected to the capital gain tax. 

If you have more than one property the government would consider the non residing property you are intending to sell as your rental or investment property and will likely be subject to the capital gain tax.  The moment you sell your rental or investment property 50% of the net profit will be added to your income for that year.

If you purchased a property for $500,000 5 years ago and now you sell it for $800,000 that $300,000 profit must be reported as the capital gain once you file your income tax and half that amount of $150,000 is taxable.

For more information see Capital Gains.

Mortgage Obligations

If you have an existing mortgage and pending on the type of mortgage you may have there is likely a fee levied for discharging your mortgage.  This will vary with lending institutions.

Legal Fees & Disbursements

You will need the assistance of a lawyer or notary public to help process the legal documents required for sale of your home.  Your lawyer or notary public will arrange for the transfer of the cash proceeds of sale, adjustments and disbursements necessary to finalize the sale of your home.

Miscellaneous Expenses
  • Moving Costs
  • Professional Cleaning Costs
  • Repair and Renovation Costs
For more information see Home Repair & Renovation Cost Guide.