Updated Checked by the Tax-Services.ca editorial team How we check
Sell a $950,000 Ontario home with a $380,000 mortgage and you walk away with about $511,325, after $58,675 of selling costs. Commission plus HST is the biggest piece at $53,675. The tax is usually $0 if the house was your principal residence. A mortgage penalty, if you have one, can take another $5,000 to $10,000.
How much of a $950,000 sale do you keep?
Subtract the mortgage first, then each cost in turn. The figures come from the site’s home-sale engine and assume a 5% commission, 13% Ontario HST on that commission, $2,000 for legal fees and adjustments, and $3,000 for staging, repairs and moving. Treat them as planning numbers, not a quote.
| Line | Amount |
|---|---|
| Sale price | $950,000 |
| Mortgage payoff | -$380,000 |
| Commission, 5% | -$47,500 |
| HST on the commission | -$6,175 |
| Legal fees and adjustments | -$2,000 |
| Staging, repairs and moving | -$3,000 |
| Tax on the gain (principal residence) | $0 |
| Cash to you | $511,325 |
The home sale proceeds calculator reruns this with your own price, mortgage and province.
Do you pay tax when you sell your home?
Not if the home was your principal residence for every year you owned it. The gain is exempt, but you still report the sale on Schedule 3 of your return for the year of sale, and that has been required since the 2016 tax year. If the home wasn’t your principal residence for all those years, you also fill in Form T2091. The Canada Revenue Agency: reporting the sale of your principal residence page walks through it. Report late and you may get a penalty. Skip the designation and the exemption could be at risk.
A rental or other home that doesn’t qualify is a different story. Take the same sale with a purchase price plus costs of $600,000, and $90,000 of other income. The gain is $297,500, the extra Ontario tax at the 50% inclusion rate is $65,405, and your net proceeds fall to $445,920. The principal residence gain calculator handles the partial-years case, and the article on capital gains when selling a home goes further.
How much is realtor commission, and can you negotiate it?
Yes, you can negotiate it. No law sets the rate. Each listing agreement states its own figure for the listing and buyer sides combined, and the calculator defaults to 5% combined. What you actually pay depends on your market and your agent, so treat the first quote as an opening offer. The Competition Bureau has an open investigation into the commission rules of the Greater Vancouver REALTORS and the Canadian Real Estate Association, and says it has reached no conclusion of wrongdoing (Competition Bureau Canada: real estate commission investigation).
On this sale every point is worth real money, because commission carries sales tax too. At 4% you keep $522,060. At 3% you keep $532,795. Where you live changes the tax as well: in Alberta only the 5% GST applies, so the same sale at 5% leaves you $515,125, since the tax on the commission is $2,375 instead of $6,175. Ask the agent whether a quoted rate includes tax, because some quotes leave it out.
What does breaking the mortgage cost?
If the sale ends your mortgage before the term does, the lender can charge a penalty. On a fixed rate that’s usually the higher of three months of interest or the interest rate differential (IRD), and the Financial Consumer Agency of Canada explains both methods on its prepayment penalties page.
Say you owe $380,000 at 5.2% with 30 months left, and the lender’s comparison rate is 4.1%. Three months of interest is $4,940 and the IRD is $10,450, so you pay the $10,450. Your cash to you drops from $511,325 to $500,875. A portable mortgage that moves to your next home may avoid the charge, and if the term ends in a few months, waiting can cost less than selling now. The mortgage penalty calculator estimates both methods, and the mortgage terms article covers porting and blend and extend. Get the payout figure and the discharge fee from your lender in writing.
What is the 365-day flipping rule?
A home you sell after owning it for fewer than 365 consecutive days is a flipped property, and the profit is taxed as business income. That has been the rule since 1 January 2023. The principal residence exemption doesn’t apply to a flip, and losses are denied. The Canada Revenue Agency: residential property flipping rule page lists a short set of life events that take a sale outside the rule, among them death, a change in household, a separation of at least 90 days and a threat to personal safety. If a sale was forced by something like that, read the full list.
What other costs show up before you hand over the keys?
Staging, small repairs, a pre-sale inspection, cleaning, photos and the move itself all land on you, and they’re the easiest line to overspend. The $3,000 in the table is a placeholder, so get quotes. Your mortgage keeps accruing interest until the lender is paid, which means the payout statement runs a little above your last balance, and a closing date a month away adds a month of interest. Your lawyer’s fees cover the transfer and the mortgage payout, and the adjustments settle property tax and utilities as of closing.
If you’re buying again, the closing costs checklist shows what that purchase will cost. The cash from this sale won’t arrive until closing day, so the two don’t always line up.
Where does this information come from?
Reporting and flipping rules come from the Canada Revenue Agency and the penalty method from the Financial Consumer Agency of Canada (checked October 2026); proceeds, penalty and tax figures are estimates from the site’s home-sale engine. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
Do I report the sale of my home if there is no tax?
Yes. Since the 2016 tax year, you report the sale of a principal residence on Schedule 3, and on Form T2091 as well if the home wasn't your principal residence for every year you owned it. Skipping the report can cost you the exemption or bring a late-filing penalty.
Is real estate commission regulated in Canada?
No law sets the percentage. You and your agent agree on it in the listing agreement. On a $950,000 sale, moving from 5% to 4% saves $9,500 before HST, which is $10,735 with 13% HST included.
Can I avoid the mortgage penalty when I sell?
Sometimes. Ask whether the mortgage is portable to your next home, wait for the term to end, or use any prepayment privileges. If the sale date is firm, get a written payout statement from the lender so you can compare three months of interest with the IRD.
What if I sell a home I owned for only 8 months?
The flipping rule covers any home owned under 365 consecutive days. The full gain is taxed as business income instead of 50% of it, and a short list of life events can excuse the sale. Without one, you can't claim the principal residence exemption.
How much tax would I pay on a house that was not my principal residence?
In our example, a $297,500 gain with $90,000 of other income in Ontario adds $65,405 of tax. Only half the gain is taxable, and your own bill depends on your other income and province, so treat this as an estimate.