The True Cost of Selling a Home in Ontario
Real Estate Fees
If you are using a real estate agent to list and sell your property, there is a fee you’ll pay once the home is sold. This fee varies across different areas but you can expect to pay between 5%-7% of the selling cost. This fee will be split between your real estate agent and your buyer’s agent.
If you’re selling your home before you’ve finished paying off your mortgage, you may be required to pay a discharge fee of $270 to the bank. In the case of a closed mortgage, you may be required to make prepayment costs which may be equivalent to several months of mortgage payments. Your mortgage costs are largely determined by interest rate and the number of years outstanding. If you’re buying another home, you have an option of transferring your mortgage to the new property.
A lawyer will help you with the purchase and sale transactions. Legal fees may vary with firms, but you can expect to pay a minimum of $500. Registration fees, related expenses and disbursement charges could cost you more. You will pay sales tax which varies with where you reside.
Property and Utility Tax
Home owners are required to pay property taxes annually or twice a year. The municipality requires you to continue paying property tax until you have closed the deal. For instance, if the deal closes in the middle of the month, you’ll have to pay for the first half.
These costs have to be paid off before your house passes on to the new owner. Any pending maintenance fee and liens on the property have to be settled.
Most people forget to add this cost to their expense list. You’ll be required to rent boxes or buy them, hire the services of a moving company or pay for storage costs.
Capital Gain Tax
Residents of Ontario who sell assets at a profit are required to pay the capital gains tax. For example, if you sell your home, stocks or bonds, the profit you get from the sale will be taxed. In this case, profit is what is left after you have deducted the actual cost of the house from the selling cost.
The following costs are often overlooked by most home sellers and could cost thousands of dollars.
Most home sellers repair or repaint their homes to make them more appealing to the buyer. Outdated kitchen cabinets or old chipped window frames could be a turn off for potential buyers. Consult your real estate agent and get some good advice on how you can make your home more appealing. Repair costs may quickly add up, therefore, ensure that you factor this cost in your budget.
Experts advise that it’s important to de-clutter your home to create more space. You can hire a stylist or choose to do it yourself though it may cost you more time and money. For example, you may hold a garage sale and you may need to advertise in a local newspaper or distribute flyers.