Published 27 September 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty
Start with the sale price and subtract, in order: the brokerage commission plus 13 percent HST on it; the mortgage balance; any prepayment penalty, which is usually three months’ interest or an interest rate differential; your lawyer’s fee and disbursements; the closing adjustments for prepaid or unpaid property tax and common expenses; and, if the unit was not your principal residence for every year you owned it, tax on the capital gain. As an illustration only, on a $600,000 sale with a 4 percent commission, the commission and HST come to $27,120 before any mortgage. The resale price itself carries no HST, and the buyer, not you, pays land transfer tax.
The deductions, in the order your lawyer applies them
On closing day your lawyer receives the buyer’s funds, pays out everything that is owed against the unit, and sends you what is left. The statement of adjustments and the lawyer’s trust ledger show every line. These are the lines that appear on almost every condo sale in Ontario:
- Brokerage commission, as set out in your listing agreement, plus HST at 13 percent on the commission.
- Mortgage payout: the outstanding balance, interest to the closing date and any discharge fee the lender charges.
- Prepayment penalty, if you are breaking a closed mortgage before its term ends.
- Legal fees and disbursements for your lawyer.
- Adjustments for property tax and common expenses, which can go either way.
- Tax, where the unit was not your principal residence, and a holdback if you are a non-resident.
A worked example on a $600,000 condo
Illustrative round numbers only. Commission is negotiable and this is not a quote; the example uses 4 percent simply to show the arithmetic.
| Line | Amount | Note |
|---|---|---|
| Sale price | $600,000 | Resale condos carry no HST on the price |
| Commission (illustrative 4%) | −$24,000 | Set in your listing agreement |
| HST on commission (13%) | −$3,120 | Charged on the commission, not the price |
| Mortgage balance | −$380,000 | Example balance |
| Prepayment penalty | −$4,228 | Example: three months’ interest at 4.45% on $380,000 |
| Legal fees and disbursements | −$1,500 | Get a written quote; varies by firm |
| Adjustments | ± a few hundred | Tax and common expenses to the closing date |
| Approximate net to you | about $187,000 | Before any capital gains tax |
Run your own numbers in the net proceeds calculator, which lets you change every line.
The mortgage penalty is the line that surprises people
If you have a closed mortgage and sell before the term ends, the lender charges a prepayment penalty. Lenders typically calculate it as the greater of three months’ interest or an interest rate differential (IRD), which compares your rate with the rate the lender could lend at now for the remaining term. Variable-rate mortgages are commonly charged three months’ interest; fixed-rate mortgages are the ones where the IRD can be much larger, especially when rates have fallen since you signed. The exact formula is in your mortgage contract. Two ways to reduce it: port the mortgage to your next home if your lender allows it, or time the sale close to your renewal date. Ask your lender for a written payout statement with the penalty before you sign a listing agreement, not after you accept an offer.
Closing adjustments: small but worth understanding
Property tax and common expenses are paid in advance or in arrears, so the lawyers adjust them to the closing day. If you have already paid the year’s tax instalments beyond the closing date, the buyer credits you for the days after closing; if you are behind, you pay the buyer. Condo fees work the same way for the month of closing. These adjustments are usually a few hundred dollars either way, but a missed special assessment instalment or a fee arrears shows up here, and a condo with arrears can carry a lien. The status certificate the buyer orders will state whether the unit is in arrears.
Tax: when the gain is yours to keep, and when it is not
If the condo was your principal residence for every year you owned it, the principal residence exemption usually shelters the whole gain, but you still have to report the sale and designate the property on Schedule 3 of your tax return, as the Canada Revenue Agency explains. If it was a rental, or your principal residence for only part of the time, part or all of the gain is taxable, and half of a capital gain is included in income. Talk to an accountant before you list if the unit was ever rented out.
Non-resident sellers face an extra step. Under section 116 of the Income Tax Act a buyer can be liable for 25 percent of the purchase price unless the seller obtains a clearance certificate, so buyers’ lawyers hold back funds until it arrives, and the seller must notify the Canada Revenue Agency within 10 days of the sale. That holdback can tie up a large share of the proceeds for months.
What you do not pay
- Land transfer tax is the buyer’s cost, provincially and, in Toronto, municipally.
- HST on the price does not apply to a resale home in the ordinary case.
- The status certificate is usually ordered and paid for by the buyer; the corporation can charge up to $100 including taxes and must provide it within 10 days.
Two tools help here: the AI condo value estimator below gives you a range in about a minute, and the net proceeds calculator turns any price into what actually lands in your account.
Where I fit
I put a written net-proceeds estimate in front of every seller before they sign, so the cheque holds no surprises. Run the estimator below for a price range, then book a call and we will fill in the lines together. For how commission works in Ontario, see what I charge.
Free tool — AI condo value estimator
Condo Valuation
What’s your condo
worth today?
Three quick steps. Condos don’t price like houses — your floor, your view, and whether you own parking move the number more than anything else. This weighs all of them.
Reading recent condo sales…
Estimated market value
—
$0–$0
Most likely $0 · about $0 per square foot
What moved the number
Starting from what comparable units in your area sell for, here’s what your specifics added or subtracted.
Market context
—
—
Two units, same floor plan,
$90,000 apart.
That happens constantly in condos — one has the parking, the right exposure, or a board that keeps the reserve fund healthy. A model can’t see your status certificate. I can.
What is a condo worth in your area?
August 2026 prices by city and district: Etobicoke · North York · Scarborough · Downtown Toronto · Midtown Toronto · Liberty Village / King West · Markham · Richmond Hill · Oakville · Burlington · Milton · Brampton · Pickering / Ajax · Whitby / Oshawa · Mississauga · Vaughan. Or run the AI condo value estimator for a range on your own unit.
Frequently asked questions
What costs come off the sale price when I sell my condo in Ontario?
Commission plus 13 percent HST on it, your mortgage balance and any prepayment penalty and discharge fee, legal fees and disbursements, closing adjustments for tax and common expenses, and capital gains tax if the unit was not your principal residence throughout.
Do I pay HST when I sell my condo?
Not on the price of an ordinary resale home. HST applies to the brokerage commission and to your lawyer’s fees.
How is the mortgage penalty calculated?
Typically the greater of three months’ interest or an interest rate differential, as set out in your mortgage contract. Fixed-rate mortgages are where the differential can be large; ask your lender for a written payout statement early.
Who pays land transfer tax on a condo sale?
The buyer. Sellers do not pay land transfer tax.
Do I pay tax when I sell my condo?
Not usually if it was your principal residence for every year you owned it, but you must still report the sale on Schedule 3. If it was rented out, part or all of the gain can be taxable.
What if I live outside Canada and sell my condo?
Under section 116 of the Income Tax Act the buyer can be liable for 25 percent of the price unless you obtain a clearance certificate, so a holdback is normal, and you must notify the Canada Revenue Agency within 10 days of the sale.
Sources
- CIBC — Mortgage prepayment charges — three months' interest or interest rate differential
- Canada Revenue Agency — Principal residence and other real estate — report and designate on Schedule 3
- Income Tax Act, section 116 — Justice Laws Website — non-resident sellers
- Condominium Authority of Ontario — Status certificates — 10 days, up to $100, Condominium Act s. 76
Related reading
- Real estate commission in Ontario: how much?
- What happens on closing day in Ontario
- Capital gains when downsizing in Ontario
- Should I sell or rent out my condo?
About the author — Jatin Dua, Toronto and GTA real estate broker
I am Jatin Dua, Broker of Record and co-founder of RE/MAX Quantum Realty Inc., Brokerage, Unit 101, 799 The Queensway, Etobicoke. I work with buyers and sellers across Toronto and the GTA, and I have helped more than 100 families sell their condos. Four-plus years of active GTA transactions and over $100 million in sales volume. Every market figure here comes from TRREB’s published tables and every rule from the regulator or the legislation, so you can check all of it without asking me.
Reach me at connect@jatindua.com or 833-330-1925, or book a call.