Selling costs when you’re selling your home?
Selling costs for each real estate sale will vary, but there are definitely certain expenses most homeowners can expect to encounter when they sell their property.
In Ontario, Land Transfer tax is paid by the Buyer, so when you’re selling in Ontario, this is one expense you don’t have to worry about! However, you will be responsible for the property taxes for the portion of the year that you owned the property.
You may also be required to pay capital gains tax. This will depend on if the property is your principal residence or an investment. Usually, principal residences are not subject to capital gains, however, if you’ve owned the property for less than a year we recommend that you consult with a Financial/Tax Advisor. Because investment properties are not Capital Gains exempt, it’s always wise to consult a Financial/Tax Advisor to ensure that you’re aware of any tax implications the sale of the property may have.
There may also be tax implications if you are a non-resident. Make sure you consult with your Lawyer to make sure that all of your tax withholding obligations are being met.
Mortgage Discharge Fee’s
This is one of those selling costs that many home sellers overlook. Depending on the terms of your mortgage, you might be caught off guard with unexpected mortgage discharge fees. Prior to accepting an offer on your property, you should be completely aware of how much your current mortgage provider is going to require you to pay if you discharge your existing mortgage. You can request a discharge statement from them which will outline their specific charges and fee’s.
Tenant obligations if the property is rented
If the property you’re selling is currently occupied by a tenant, make sure you’re aware of your obligations under the Ontario Residential Tenancies Act
If negotiated during the sale, the seller may also pay for a home warranty, an appraisal, pay out rental contracts on equipment such as furnaces & air conditioning units, or other closing costs for the buyer. The Seller’s lawyer usually pays for these items out of the proceeds of the sale.
And don’t forget moving expenses. These vary greatly, depending on the size and distance of your move.
Real Estate commissions and Legal fees.
Lastly, the biggest expenses a seller will incur are typically the Real Estate Brokerage commissions along with the legal fees paid to your Lawyer for handling any mortgage documents/discharges, transferring title, paying out disbursements and collecting the funds from the Buyer.
Please contact us to review any of these costs in more detail. We’re here to help!