If you’re planning to sell your house in the GTA this summer, you’ll likely make a good profit. But before we start counting the capital gains, keep funds aside for closing costs, which is typically 3-5% of the selling price. Let’s break down the costs and how to budget for them as a homeseller. 

Here are 11 closing costs you can expect when selling your home: 

1. Real Estate Agent Commission

In Ontario, this typically ranges from 3% to 7% of the home’s selling price, which covers commission for your agent as well as the buyer’s agent. Each agent usually receives 2.5% each. For a $1 million home, this could mean paying between $30,000 and $70,000 in commissions. 

2. Legal Fees

You’ll need a real estate lawyer to handle various legal tasks, including discharging the title, preparing the closing documents, and handing over the keys to the buyer. Legal fees in Ontario generally range from $700 to $1,000. The lawyer also prepares the Statement of Adjustments, which details any prepaid expenses like property taxes and utilities that need to be reimbursed by the buyer.

3. Mortgage Payout Penalties

If your mortgage term isn’t up, you might face penalties for breaking it early. These penalties can range from three months of interest to several thousand dollars, depending on your mortgage agreement. Talk to your mortgage provider before selling your property to understand the exact costs.

4. Capital Gains Tax

If the home you’re selling is not your primary residence, you may owe capital gains tax. In Canada, 50% of the profit from the sale of a secondary property is taxable. Any profit you make is added to your income tax at the end of the year. For example, if you sell a property and make a $100,000 profit, $50,000 of that amount will be added to your income for the year and taxed accordingly​​.

5. Repairs and Renovations

If you want to sell your property at a good price, you might need to make some  investment in repairs and renovations. It could be minor fixes like painting and landscaping to major repairs like replacing an HVAC system or roofing. It is advised to fix these issues before putting up on sale as if the buyer finds it during home inspection, it’ll only delay the home selling process. 

6. Staging Costs

Professional staging can significantly enhance the appeal of your home and is often provided by your realtor. If it isn’t, it can cost you from $300 to $600 per room per month. While this might seem like an unnecessary expense, a well-staged home can attract more buyers and potentially sell faster and for a higher price​​.

7. Moving Expenses

Professional moving services can cost anywhere from $750 to over $3,500, depending on the size of your home and the distance of the move​, whether you hire professional movers or rent a truck and do it yourself. 

8. Property Appraisal and Survey Fees

A property appraisal, which typically costs between $300 and $500, is often required by the buyer’s lender to ensure the home’s value matches the loan amount. Additionally, a land survey, costing between $1,000 and $2,500, might be necessary to confirm property boundaries and prevent future disputes​​.

9. Government Registration Fees

These fees cover the cost of legally transferring the property title from the seller to the buyer. They include land title registration and deed transfer fees, which are essential for the legal validation of the transaction. The exact amount can vary but generally falls within a few hundred dollars​. 

10. Utility and Other Adjustments

You’ll need to account for any utility bills and property taxes that have been prepaid. These costs are prorated and adjusted at closing. The buyer is responsible for paying fees for the rest of the year. 

11. Title Insurance

Title insurance protects the buyer and lender against any title defects or legal issues that could arise after the sale. This one-time fee typically costs between $250 and $400. 

Prepare a selling plan that breaks down the steps and costs involved. It will make the process more predictable and avoid any surprises later. Always consult with a local real estate agent or financial advisor throughout the process.