Before You Downsize in Markham: Taxes, Belongings and Timing

The short answer

• Downsizing in Markham can free up equity, but the smaller home may still carry a meaningful price tag.
• Condo maintenance fees and land transfer tax on the new purchase need to be factored into your real budget, not just the sale price difference.
• Deciding whether to sell first or buy first depends on current market conditions and how much risk you’re comfortable carrying.
• Sorting through decades of belongings takes longer than most people expect, so start earlier than you think you need to.
• Staying in Markham is worth pricing out, since the city offers condos, townhouses and bungalows.

Why Markham Homeowners Downsize

The reasons are fairly consistent across the clients I work with. The kids have moved out and three or four bedrooms sit empty most of the year. The stairs, the lawn, the driveway in winter, all of it becomes more work than it used to be. Or the equity in the house makes cashing out part of it more appealing than holding onto space nobody uses.

Some people are planning for retirement income and want to free up equity without selling investments. Others simply want less to manage so they can travel or spend time on things other than home maintenance. There’s rarely one single reason. It’s usually a combination of lifestyle and finances arriving at the same conclusion around the same time.

What Downsizing in Markham Actually Looks Like

Downsizing doesn’t always mean a dramatic drop in price. Selling a detached home can free up a lot of equity, but a well-located condo or townhouse in the same city can still carry a meaningful price tag, especially in newer buildings or central areas like Unionville or Cornell.

What usually changes is not the price but the ongoing cost and effort. A smaller unit often means less to heat and cool, no landscaping or snow removal and often a lock-and-leave lifestyle that suits people who travel. Whether that’s a net saving depends heavily on condo fees, which we’ll get into below.

Common Downsizing Paths in Markham

• Detached house to a condo apartment in a central Markham building.
• Detached house to a townhouse, keeping a bit of outdoor space without full yard upkeep.
• Large detached home to a smaller bungalow, often to avoid stairs.
• Selling in Markham and buying in a nearby town, if the numbers work.

Selling First or Buying First

This is the question I get asked most and there isn’t one right answer. It depends on the market at the time and your personal tolerance for risk.

Selling first gives you a firm number in hand. You know exactly what you have to work with before you commit to a purchase price. The tradeoff is you may need to arrange temporary housing or negotiate a longer closing or rent-back period with your buyer, if your next place isn’t ready.

Buying first means you lock in your new home before you have to move, which removes the stress of finding somewhere on a deadline. The risk is carrying two mortgages or two sets of carrying costs, if your current home takes longer to sell than expected. In a slower market this risk is higher. In a fast market it’s lower, but you also don’t want to overpay out of urgency.

A middle path some Markham sellers use is making an offer conditional on the sale of their existing home, though this is a harder condition for a seller to accept in a competitive market. Talk through the current conditions with your agent before deciding which route fits your situation.

What It Actually Costs to Downsize

The sale price minus the purchase price is only part of the math. Here’s what else factors in.

Cost Item	What It Covers	Notes for Markham Sellers
Real estate commission	Paid on the sale of your current home	Negotiated between you and your listing agent
Legal fees	Lawyer for both the sale and the new purchase	Get quotes from a real estate lawyer for both transactions
Land transfer tax	Paid on the purchase of your next home	Ontario charges this provincially and the City of Toronto adds its own municipal tax, so confirm the current amount for your purchase with your lawyer
Moving costs	Movers, packing, possible storage	Varies widely with volume and distance, get a written quote
Condo status certificate review	Lawyer reviews the certificate, which covers the budget, reserve fund and common expenses	Applies only if you’re buying into a condo building
Ongoing condo fees	Monthly charge covering building upkeep, amenities, reserve fund	Varies by building, so ask for the current fee and the reserve fund details
Home preparation costs	Decluttering, staging, minor repairs before listing	Weigh the cost against what your agent expects it to change

Taxes and Downsizing: What to Confirm Before You List

If your Markham home has been your principal residence the entire time you owned it, the sale is exempt from capital gains tax under the Canada Revenue Agency’s principal residence rules. You still have to report the sale and designate the home as your principal residence on your tax return.

The rules get more involved if the home was not your principal residence for every year you owned it, for example if you rented part of it or own a second property such as a cottage. In those cases part of the gain may be taxable. Talk to an accountant before you list, since the right answer depends on your own situation.

Sorting Through Decades of Belongings

This is the part people underestimate. A family that’s lived in the same Markham house for twenty or thirty years usually has more stored away than they remember. Basements, garages and attics fill up quietly over the years.

Give yourself three to six months if you can. Sort into four categories: keep, sell, donate, discard. Be honest about what will actually fit into a smaller space, because a common mistake is holding onto furniture sized for a house you’re leaving.

Many of my clients bring in a senior move manager or estate sale company for larger downsizes. It costs money, but it saves an enormous amount of time and emotional energy, especially when family members disagree about what should stay or go.

Choosing Where to Downsize To

Staying in Markham is realistic for most budgets. The city has a wide enough range of condos, townhouses and bungalows that most people can find something that fits, whether that’s a low-rise building in Unionville or a townhouse near Angus Glen. Our downsizing in Markham page has more on the options.

Some downsizers choose to move further out, toward Stouffville, Uxbridge or further into York Region. That can change the numbers, but it also means adjusting to a new community, further distances to family and different access to transit and services. It’s worth weighing both directions honestly rather than assuming further out always means a better deal.

Timing Your Downsize With the Market

Markets shift through the year, but downsizing decisions are usually driven more by life circumstances than by trying to time the market perfectly.

That said, it helps to know current conditions before you commit to a plan. Conditions affect how much room you have to negotiate a longer closing or a rent-back arrangement, which reduces the pressure to have your next home lined up immediately.

What to Do Next

If downsizing in Markham is something you’re seriously considering, here’s a practical starting point.

• Get a current market evaluation of your home so you know roughly what equity you’re working with.
• Start decluttering now, even before you’ve decided exactly when you’ll list.
• Book a conversation with an accountant if your tax situation involves anything beyond a straightforward principal residence.
• Tour a few condo or townhouse buildings in the areas you’re considering to get a feel for fees and layouts.
• Talk to your agent about current market conditions so you can decide whether selling first or buying first makes more sense right now.

If you’re weighing a downsize and want a read on your options, reach out to Kirby Chan and we can talk through your situation. You can also read about selling with us.