Published 7 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
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Get My Free Estimate →Because the capital released is smaller than the price difference. On the purchase side, a $2,500,000 condominium in Toronto attracts $48,975 in Ontario land transfer tax and $48,975 municipally — roughly $97,950 in cash on closing. On the sale side there is commission plus HST and legal costs. And the ongoing costs do not fall as far as expected, because condominium fees include things a house owner was paying separately.
The genuine advantages are real and often decisive: no maintenance, lock-and-leave security, single-floor living, and the ability to redeploy capital. The mistake is treating the difference between two prices as the money you will actually have.
The number people start with
Sell the house for $4,500,000, buy a condominium for $2,500,000, release $2,000,000. That is the mental model, and it is wrong by a meaningful margin.
The number after transaction costs
| Item | Effect |
|---|---|
| Sale price | $4,500,000 |
| Selling costs — commission plus HST, legal, discharge | Several per cent, reducing net proceeds |
| Purchase price | $2,500,000 |
| Ontario land transfer tax on the purchase | $48,975 |
| Toronto municipal land transfer tax on the purchase | $48,975 |
| Legal, title insurance, adjustments on the purchase | Additional |
| Moving, storage and disposal of contents | Substantial on a large house |
| Fitting out the new home | Almost always underestimated |
Nearly $98,000 in land transfer tax on the purchase alone, in cash on closing, on a downsize. It is not financeable and it is not refundable.
The ongoing costs do not fall as far as expected
A condominium fee looks alarming next to a house’s apparent zero, but it typically includes heating and cooling, water, insurance on the common elements, concierge and staffing, amenity operation, management, and the reserve fund contribution.
The house owner pays every one of those categories. The difference is that nobody sends them a monthly statement, and almost nobody saves for the roof. What genuinely changes is predictability, not necessarily total cost — though in a full-service building with a small number of units, the staffing component is a real increase.
The sequencing problem
| Sell first | Buy first | |
|---|---|---|
| Certainty about proceeds | Yes | No |
| Negotiating position on the purchase | Strong — you can close | Weaker, and conditional |
| Risk | Interim accommodation and storage | Carrying two properties |
| Suits | A thin market where selling takes time | A specific target property that will not wait |
In the current market, the house side is thin — roughly 300 GTA sales above $3 million across four months — while the broader condominium side has a record 4,295 completed unsold units. That asymmetry argues for selling first and buying into a well-supplied market, but it is a personal decision rather than a rule.
What actually makes downsizing worth it
- No maintenance. Nobody calls you about the roof.
- Lock and leave. Genuinely valuable if you travel.
- Single-floor living, which matters more with time than most people admit in advance.
- Location. A condominium can put you somewhere no house is available at any price.
- Redeploying capital — the real financial argument, and it should be assessed with a financial adviser rather than a real estate agent.
Two tax points
Where the house was your principal residence for every year of ownership, the exemption applies with no dollar cap, and the capital gains inclusion rate remains 50% following the cancellation of the proposed increase on 21 March 2025.
And once you own the condominium, the annual Vacant Home Tax declaration applies to it as it does to any Toronto residential property — particularly relevant if you travel for long periods.
The practical takeaway
Do the arithmetic properly before you decide: net proceeds after selling costs, minus the purchase price, minus close to $100,000 in land transfer tax on a $2.5 million condominium, minus moving and fitting out. Then compare the ongoing costs honestly rather than comparing a visible condominium fee against an invisible house budget.
Frequently asked questions
How much land transfer tax will I pay downsizing to a Toronto condo?
The same rates as any purchase. At $2,000,000 it is $36,475 provincially and $36,475 municipally, for $72,950. At $2,500,000 it is $48,975 each, for $97,950. At $3,000,000 it is $61,475 each, for $122,950 — all payable in cash on closing.
Do condo fees really cost more than running a house?
They look higher because they are visible. A condominium fee typically includes heating and cooling, water, insurance on the common elements, staffing and the reserve fund contribution. A house owner pays those categories too — unpredictably, and often without saving for the major items.
Should I sell first or buy first?
This is the sequencing problem and it has no universal answer. Selling first gives you certainty about proceeds and a stronger negotiating position on the purchase, at the risk of needing interim accommodation. Buying first removes that risk and exposes you to carrying two properties in a market where roughly 300 GTA homes sell above $3 million in four months.
Is now a good time to buy a Toronto condo?
The broader condo market is unusually favourable to buyers, with a record 4,295 completed unsold units at the end of Q1 2026 and resale pricing around 25% below the early-2022 peak. The core luxury condo segment has not softened in the same way — $5 million-plus core sales doubled from two to four in the same period.
Will I pay tax on the gain from selling my house?
Where the property was your principal residence for every year of ownership, the principal residence exemption applies and has no dollar cap. Where it was not, or where you own more than one property, speak to an accountant about the designation.
What ongoing obligation do I take on with a condo?
Common expenses, and in Toronto the annual Vacant Home Tax declaration, which is required for every residential property whether occupied or not. Failing to declare defaults the property to vacant at 3% of Current Value Assessment.
Thinking about buying or selling at the top end?
Send me the address, or the shortlist you are considering. I will tell you what the property is actually worth today, what the land is worth without the house, what the transfer tax and carrying costs will be, and whether the deal makes sense. Confidential, always.
connect@jatindua.com · 437-987-1925 · Book a free consultation
Confidential. Read personally and answered within 24 hours. I never share, sell or distribute your information.
Related reading
- Luxury condo or luxury house in Toronto? A real cost comparison
- Why luxury condo maintenance fees are so high
- Land transfer tax on a luxury home in Toronto: the full 2026 numbers
- The Toronto luxury condo market in 2026: two markets in one city
Sources
Everything above that is a rule, a rate or a published number comes from these. Verify anything that matters to your own deal.
- City of Toronto — Municipal Land Transfer Tax rates and fees
- Government of Ontario — Calculating land transfer tax
- Real Estate Magazine — Q1 2026 condominium market (Urbanation data)
- RE/MAX Canada — 2026 Spotlight on Luxury Real Estate, Greater Toronto
About the author — Jatin Dua, Broker of Record
I’m the Broker of Record at RE/MAX Quantum Realty, 799 The Queensway in Etobicoke, and I work with buyers, sellers and investors across Toronto and the west GTA. A large part of my work sits in the upper end of the market, where the comparables are thin, the rules are heavier and the cost of a wrong number is measured in hundreds of thousands of dollars.
The free estimators on this site are mine. I built them because the first question every owner asks is “what is it worth?” and the honest answer starts with a number you can check yourself. connect@jatindua.com or 437-987-1925.