What selling a house in Ontario costs a Markham seller at closing

The short answer

Selling a house in Ontario costs more than the commission, but the list of seller closing costs is short. The Real Estate Council of Ontario (RECO) tells sellers to budget for real estate commissions, legal fees and moving expenses. If you still have a mortgage, the lender is paid out of the sale on closing day. Paying it off before the end of its term can add a prepayment penalty.

Land transfer tax is not on the list, because the buyer pays it. The sale does create a tax filing: the Canada Revenue Agency (CRA) requires you to report the sale of your principal residence on your return to claim the exemption.

This post walks through each cost in the order it usually shows up, then puts them in one illustrative table so you can see what is left after closing.

What selling a house in Ontario costs, according to RECO

RECO’s seller’s checklist has a line titled “Budget accordingly”. It reminds sellers that selling a home comes with closing costs, naming real estate commissions, legal fees and moving expenses among them.

The same checklist raises a timing point that often costs money. It asks whether the closing date on the sale of your current home lines up with your next home. It suggests a contingency plan in case the dates do not match. Two closings on different days can mean bridge financing, a short rental or storage. Our post on selling first or buying first sets out both paths.

Cost	Who it goes to	What sets the amount
Commission plus HST	Your brokerage	Your listing agreement, plus 13% HST
Mortgage payout, penalty and fees	Your lender	Your mortgage contract
Legal fees and disbursements	Your real estate lawyer	The lawyer’s quote
Moving and storage	Your movers	The moving quote
Land transfer tax	Not the seller. The buyer pays it	Ontario’s rates, on the buyer’s price

Commission and the HST on it

Commission is set by your listing agreement with your brokerage. Our guide to real estate commission in Ontario explains how it can be a fixed amount, a percentage or a mix. It also sets out what the agreement has to say.

Two points matter for your net figure. First, HST is added to commission. The CRA says a real estate agent who is registered for the GST/HST “has to charge and remit GST/HST on their commission.” It lists the HST rate in Ontario as 13%. On an illustrative commission of $30,000, the HST is $3,900.

Second, look at the buyer’s side. RECO Bulletin 6.2 says “the buyer client is the party responsible for the fees associated with the representation.” A seller may agree, through a remuneration clause in the agreement of purchase and sale, to pay an amount that compensates the buyer for those fees. RECO describes that clause as a simple, transparent way to address the buyer’s obligation and says it is not a “cash back” clause. Whether you agree to it and how much you pay are terms you negotiate. Read it carefully, because it changes what you take home.

Paying off your mortgage: penalties and fees

Most sellers with a mortgage pay it off when the sale closes. The Financial Consumer Agency of Canada (FCAC) says a lender may charge a prepayment penalty if you pay back your entire mortgage before the end of your term, “including when you sell your home.” It warns that penalties can cost thousands of dollars.

FCAC says the penalty will usually be the higher of:

• three months’ interest on what you still owe
• the interest rate differential, known as the IRD

FCAC says the lender will usually use the IRD calculation if your interest rate is higher than the current rate and you signed your contract less than 5 years ago. You may also have to pay an administration fee.

As an illustration only, three months’ interest on a $400,000 balance at 4.8% is $4,800. Your lender’s figure could be higher if the IRD applies. FCAC notes that federally regulated lenders such as banks have a prepayment penalty calculator on their websites. It also tells borrowers to check with the lender for the actual amount.

If you are buying again, porting may avoid the penalty. FCAC describes portability as taking your existing interest rate, terms and conditions with you to your new home, which “saves you from breaking your mortgage contract and getting a new one.” Our post on porting a mortgage when you move up covers how that works with an insured mortgage.

Legal fees and the property tax side

Your real estate lawyer handles the sale side of the closing. Fees vary by firm, so ask for a written quote that lists the fee, disbursements and HST before you sign the listing agreement. RECO’s checklist suggests seeking independent legal advice before you sign a listing agreement, which is also a good moment to ask about the closing quote.

Property tax comes up in the closing paperwork too. The City of Markham sells a tax certificate, which it describes as a legal document that an owner, a lawyer or a bank can purchase. As of January 1, 2026 the fee is $146.00. Ask your lawyer whether one is being ordered and whose account it goes on. The City also has a Property Ownership Change form that owners can use to tell it about a new owner.

Ask your lawyer how property tax you have already paid for the year will be shared with the buyer. Our post on closing day in Ontario explains the statement of adjustments, the document that sets out those amounts.

What the seller does not pay

Ontario’s land transfer tax page says the tax is paid by the person acquiring the land or a beneficial interest in it. It adds that “you pay land transfer tax to the province when the transaction closes.” In a sale, that is the buyer, so it is not one of your selling costs.

If you are selling and buying at the same time, you will pay land transfer tax as the buyer of your next home. Budget for it in the purchase, not the sale. Our land transfer tax calculator shows the figure for any price.

Tax reporting after the sale

The principal residence exemption can shelter the gain on the home you live in, but only if you file the right forms. The CRA says that when you sell, “you must report the sale on Schedule 3, Capital Gains or Losses.” You designate the home as your principal residence on Form T2091(IND). If it was your principal residence for every year you owned it or for all but one, you complete only page 1 of that form. You also complete Part 2 of Schedule 3.

The CRA is clear that it “will only allow the principal residence exemption if you report the disposition and designation.” If you forget, it will accept a late designation in certain circumstances, but a penalty may apply. Our post on the principal residence exemption covers the rule in more depth. Confirm your own position with an accountant.

If the seller is not a resident of Canada

A different rule applies to non-resident sellers. The CRA says the non-resident vendor must notify it about the sale. It adds that “notification is required within 10 days of the date the property was disposed of.” The late penalty is $25 a day, with a minimum of $100 and a maximum of $2,500.

Once the seller pays the tax or gives acceptable security, the CRA issues a certificate of compliance. Without it, the CRA says the buyer “is entitled to withhold 25% (50% on certain types of property) of the proceeds.” That can hold back a large part of the sale money, so non-resident owners should speak to a lawyer and an accountant before listing.

A worked example of a seller’s net proceeds

These numbers are made up for illustration. Only the 13% HST rate comes from a source. Your own figures will depend on your agreement, your mortgage and your lawyer’s quote.

Item	Amount
Sale price	$1,200,000
Commission, illustrative	minus $30,000
HST on commission at 13%	minus $3,900
Mortgage balance paid out	minus $400,000
Prepayment penalty, three months’ interest at 4.8%, illustrative	minus $4,800
Legal fees and disbursements, illustrative	minus $1,500
Moving, illustrative	minus $3,000
Left after closing	$756,800

The costs other than the mortgage come to $43,200 in this example. Property tax and utility adjustments are left out because they depend on the closing date and what you have already paid.

What to do before you list

1. Ask your lender for a payout statement estimate and the prepayment penalty on your mortgage. Ask whether porting is an option.
2. Read the commission terms in the listing agreement, including any amount you agree to pay toward the buyer’s brokerage fees.
3. Get a written quote from your real estate lawyer that lists fees, disbursements and HST.
4. Check that your sale closing date lines up with your purchase. If it does not, price the gap.
5. Keep your purchase records and improvement receipts for the tax filing.
6. If you live outside Canada, speak to an accountant about the CRA notification before you accept an offer.

Our seller services page explains how we plan a sale. A home valuation gives you a starting point for the sale price in the table above. If you would like to work through these numbers for your own home, contact us.