The headline number on a $700,000 Ontario house sale isn't what lands in the seller's account. Between commission, legal fees, mortgage discharge, statement of adjustments, and capital gains where it applies, the take-home figure is often 6% to 9% lower than the sale price.
This walks through every category of cost on an Ontario residential sale, what each one typically runs, and where the headline-to-net delta actually comes from.
Real estate commission
The biggest single line item on most Ontario sales. Total commission typically runs 4% to 5% of the sale price on a standard residential deal, split between the listing brokerage and the buyer's brokerage. Some brokerages negotiate. Some flat-fee platforms charge less. Discount brokerages exist, but the realistic range for full-service representation is 4% to 5%.
On a $700,000 sale at 4.5% total commission: $31,500. On a $1.2M Toronto sale at 4.5%: $54,000. On a $400,000 Hamilton sale at 5%: $20,000.
HST applies on commission. At 13% in Ontario, that adds another 0.52% to 0.65% of the sale price to the bill. On the $700,000 example: roughly $4,100 in HST on top of the commission itself.
Lawyer fees and disbursements
Every Ontario residential sale closes through a licensed real estate lawyer. The lawyer handles title transfer, mortgage payout, registration with the land registrar, statement of adjustments, and trust accounting on the deposit.
Lawyer fees on a standard residential sale in Ontario typically run $1,200 to $2,500 plus disbursements. Disbursements include title insurance, registration fees, courier costs, search fees, and a few smaller items. Total all-in including HST is usually $1,500 to $3,500.
More complex files — estate properties, sales with title issues, multi-property files — run higher.
Mortgage discharge fees
If there's a mortgage on the property, the lender charges a discharge fee to release the lien on closing. Discharge fees vary by lender. The big six banks typically charge $250 to $400. Some lenders charge less, some more.
If the mortgage is closed (fixed-term) and you're breaking the term, there's also an early payout penalty. On a fixed-rate mortgage with significant time remaining and a rate differential, this can run from a few thousand to (rarely) tens of thousands. Variable-rate mortgages typically have a three-month interest penalty, which is much smaller.
Open mortgages and mortgages within their last 90 days of term have no early payout penalty.
Statement of adjustments
Closing prorates property taxes, condo fees, fuel, and any other recurring charges between buyer and seller as of the closing date. If the seller paid property tax for the year and closing is in July, the buyer reimburses the seller for the unused portion. If the seller hasn't yet paid this year's taxes and closing is in March, the seller owes the buyer the share for the months they owned the property.
This isn't really an "added" cost — it's timing. But it's worth understanding because the closing-day cheque the seller receives reflects all of these adjustments together.
Where else HST lands
HST applies on commission, on lawyer fees, on title insurance, on most home inspection and appraisal services. HST does NOT apply to the sale of a used residential home itself — the principal-residence exemption from GST/HST handles that. It does apply to new builds and substantially-renovated homes, but on a resale of an existing principal residence, the HST on the sale price itself is zero.
For investor sellers, HST mechanics on the disposition of a rental can be more complex. The capital-gains-rental page covers that side.
Capital gains on a non-principal residence
If the property isn't your principal residence — a rental, a cottage, a second home — you owe capital gains on the gain since acquisition. The federal inclusion rate is currently 50% of the gain, taxed at your marginal rate.
On a rental where the gain is $200,000: 50% of that ($100,000) gets added to your income for the year. At a typical Ontario marginal rate around 43% in the top brackets, that's roughly $43,000 in additional tax.
Principal residences enjoy the principal residence exemption — no capital gains on the sale of a home that's been your principal residence for every year you owned it. Multiple residences in the same year, or a property that was sometimes a rental and sometimes a residence, get more complex. The capital-gains-rental page covers the principal-residence exemption rules, CCA recapture on rentals, and Vendor Take-Back options for spreading the gain.
"We cover closing costs" — what that means on a cash sale
When a cash buyer says "we cover your closing costs," the practical effect is the buyer pays the seller's legal fees (the $1,500 to $3,500 above), the title insurance, and the registration. Commission disappears because there's no listing brokerage involved. The seller's net jumps accordingly.
Worked example: a $700,000 sale through a Realtor at 4.5% commission with $2,500 in lawyer fees plus $400 in mortgage discharge plus HST nets the seller about $700,000 − $31,500 commission − $4,100 HST on commission − $2,500 lawyer − $400 discharge = roughly $661,500. A direct cash sale at $680,000 with the buyer covering closing costs nets the seller $680,000 − $400 mortgage discharge = $679,600. A higher gross sale price isn't always required to net more.
(Numbers illustrative — actual offers depend on the property and current market conditions.)
What this isn't
Not legal, financial, or tax advice. Specific files turn on specific facts — mortgage terms, principal-residence status, capital gains history, regional commission norms. Talk to a real estate lawyer and an accountant about your specific cost picture before listing or signing.
Getting a number
Want to know what a direct cash sale would actually net for your Ontario property — with the headline figure and the deductions made honest? Submit the property and you'll have a written cash offer back within 24 hours. The MLS-failed page covers situations where the listing route didn't pan out, and the Ontario hub covers every market we buy in.
