On a $3,000,000 Toronto home sale, expect total selling costs of roughly 4.5 to 5.5 percent of the sale price, mainly real estate commission plus HST, legal fees, and a mortgage discharge fee. That puts typical net proceeds in the $2.85 million to $2.9 million range before any mortgage payout, prepayment penalty, or capital gains tax on a non-principal residence. The two numbers that move this the most are your negotiated commission rate and whether the property was your principal residence the whole time you owned it.
Ask any Toronto seller what they expect to net on a $3 million home, and you'll usually hear a number based on the sale price alone. That's not the number that lands in your account.
Between commission, legal fees, and a handful of smaller closing costs, a straightforward luxury sale in Toronto typically costs 4.5 to 5.5 percent of the sale price before you factor in your mortgage payout. On a $3 million home, that's the difference between picturing $3 million and actually receiving somewhere closer to $2.85 million to $2.9 million. This is one of the first questions I walk every seller through before we even talk about listing price, because the number that matters is what hits your account, not what's on the sign.
Here's the breakdown, using a $3,000,000 sale as the working example.
Add it up at a 4 percent commission rate, and you're looking at roughly $138,400 in total selling costs, which nets you approximately $2,861,600, or about 95.4 percent of the sale price. Negotiate commission down to 3.5 percent, and your net moves up to roughly $2,878,550, or about 95.95 percent. Neither figure includes your mortgage payout, a possible prepayment penalty, or capital gains tax, which we'll get to below.
Commission is the biggest lever on this list, and it's also the most negotiable. Real estate commission in Ontario has never been fixed by law or regulation. TRESA's newer transparency rules mean agents now have to be clearer about what their commission covers and why, which has pushed rates down somewhat, especially on higher-value properties where the absolute dollar figure is already significant.
That doesn't mean the lowest rate is the right choice. The right agent for a $3 million listing isn't just negotiating their own commission, they're getting your home in front of the buyers who can actually close at this price point, which is worth more than the percentage point you might save elsewhere. If you're evaluating who should list a luxury property, it's worth reading through how to choose a top realtor to list and sell your home in Toronto and the qualities Toronto sellers should look for in a listing agent before you sign anything.
Two items on this list aren't part of the standard closing cost breakdown, and they're the ones that catch high-net-worth sellers off guard.
Mortgage prepayment penalty. If you're selling before your mortgage term matures, especially on a fixed rate, your lender may charge a prepayment penalty. This can run into the tens of thousands of dollars and dwarf every other cost on this list. Call your lender for your exact payout figure before you set a listing price or a closing date, not after.
Capital gains tax. If the property was your principal residence for the entire time you owned it, you generally don't owe capital gains tax on the sale. If it was an investment property, a secondary home, or your principal residence for only part of your ownership period, 50 percent of the gain is taxable at your marginal rate. This comes up often with investors who are weighing whether to sell a property outright or hold it, and if that's your situation, it's worth reading the cash flow myth from a GTA real estate investor's perspective before you decide.
This isn't tax or legal advice. Talk to your accountant about your specific capital gains position and your lawyer about your final statement of adjustments before you list.
The sale price is the headline number, but the number that funds your next move is what's left after commission, legal fees, and whatever mortgage costs apply to your situation. Every one of those levers, especially commission and timing around your mortgage term, is something we work through together before your home ever hits the market.
If you're thinking through this for your own sale, I'm happy to run the actual numbers for your property. Reach out anytime at ryan@connect.ca, or send your details through this form and we'll get back to you.
No. Land transfer tax, both the Ontario provincial tax and Toronto's municipal tax, is paid by the buyer, not the seller. As a seller, your main closing costs are commission, legal fees, and any mortgage-related charges.
Total commission in Ontario typically runs 3.5 to 5 percent of the sale price, split between the listing and buyer's agents. On luxury properties over $3 million, sellers often negotiate toward the lower end of that range since the dollar amount is already substantial.
If the property was your principal residence for the entire time you owned it, no. If it was an investment property, a secondary home, or only your principal residence for part of the ownership period, 50 percent of the gain is taxable at your marginal rate. Talk to your accountant to confirm your specific position.
If you're selling before your mortgage term matures, especially a fixed-rate mortgage, your lender may charge a prepayment penalty that can run into the tens of thousands of dollars. Call your lender for your exact payout figure before you set a listing price or a closing date.
Straightforward resale closings in Ontario typically run $1,200 to $2,500 in legal fees, though luxury sales often land closer to $2,000 to $3,500 given more complex title, trust, or financing arrangements. Your lawyer can give you a firm quote once they see your specific file.
About Ryan Coyle
Ryan Coyle is a Toronto real estate broker and investor with more than 20 years in the industry and over $2 billion in real estate transactions. He personally holds a portfolio of 40+ doors and helps buyers, sellers, and investors build long-term wealth through Toronto real estate. Ryan leads Connect, a full-service GTA brokerage focused on the downtown core and north Toronto's luxury market. Learn more at connect.ca.
