Selling a property in Toronto and the GTA: everything you need to know

7 steps to selling your home

There’s more to selling a condo or house than just putting it on MLS and hoping for the best. Once you’ve chosen an agent you want to work with, here’s an overview of what a typical property sale might look like. 

Step 1: Setting a price

Your agent reviews comparable listings – both for sale and recently sold – to get a sense of the current market value of your property. Then they decide on their pricing strategy. It could be close to market value – or a bit below market to generate interest and attract multiple offers. The strategy depends on what’s happening in the market – right now, demand for properties has cooled, thanks to increasing interest rates. Bidding wars are no longer the norm, and a good agent will know that, and help you set a price that fits the circumstances. 

Step 2: Staging

Spending some extra cash on making the property appeal to buyers is usually worth every penny. It allows them to picture the possibilities of the place…instead of being turned off by your cluttered closet, unusual wall colour, or ugly dining room table. A well-connected agent will have a trusted staging partner or two on call. 

Step 3: Marketing 

The more eyes on your listing, the greater the chances of selling it quickly for the highest possible price. And getting those eyes requires marketing – which includes professional photography, videos, social media, print marketing materials, and possibly some “coming soon” messaging to drum up interest. In a cooling market, great marketing is more important than ever. 

#insidertip Be wary of an agent that just takes pictures on their phone: beautiful, professional photos are the most compelling element in a listing and aren’t something to skimp on. 

Read more: Tips for selling your home for top dollar

Step 3: Your listing hits the market

Your property is listed on MLS, condos.ca and/or any number of other listing services, there for the world to see (and hopefully, buy). People will start booking showings to come and take a look. 

Step 4: Offers

Depending on what you and your agent have decided is the best strategy, you can either accept offers as they come in or set an offer day and review them all then – though offer days are more common in a hotter market than the one we’re in now. 

Step 5: Negotiation

Your agent’s job is to get you the best price and terms for your property: if offers come in that are lower than what you were hoping for or with terms you’re not comfortable with, you can either reject them or respond with counteroffers. 

Step 6: You accept an offer 

Once you’ve said yes to an offer, the buyers will give you a deposit. That seals the deal, putting you under contract with the buyers. Neither party can back out without penalties unless you both agree. 

Step 7: Closing day 

This is the day the sale is official: the buyers’ lawyer transfers the funds to your lawyer, you hand over the keys and vacate the property…moving on to bigger (or smaller) and better digs. 

Read more: 10 mistakes for sellers to avoid

Buying or selling: what comes first?

What’s better, selling your current home before you buy a new one? Or finding your next place first and then selling? Short answer: it depends. 

Ultimately, your decision will depend on two things: market dynamics and your personal situation. Your best bet is to time the sale and purchase so they happen on the same closing date. 

Buying first

Pro: You can take your time to find the perfect place

Con: If your property doesn’t sell fast, you could end up carrying two properties

In a sellers’ market like the one we were in early 2022, buying first can be a good idea. When supply is limited and demand is high, you can probably sell pretty fast, but finding the right place can take a while. Having to buy within a specific time frame adds a lot of pressure. 

Once you’ve found your new place, you can sell your current one and negotiate closing dates that work for you. But if you do face a gap where your closing dates don’t line up, bridge financing is an option – talk to your lender or mortgage broker early in the process if you think you might need it. 

Related info: Bridge financing explained

Selling first

Pro: You know exactly how much you can spend on a new place

Con: You have to find your next place before the first one closes...or move twice 

Selling first means you know exactly how much money you have to work with for your purchase, which is great – there’s no guesswork involved. But it also means you’ll have to find a new place before the sale closes, which can be tough in a low-inventory market. If the timing doesn’t work, you may have to find a temporary place to live. 

A knowledgeable REALTOR can help you navigate the complexity, factoring in area, housing type, and market status to help you make a decision that's right for you.

Who pays agents' commissions?

When a property is sold, how do the agents get paid? The seller pays the real estate commission, which is split evenly between the buyer agent and the seller agent. In Toronto and the GTA, the typical real estate commission is 5% of the selling price, half of which goes to each agent. All marketing and business expenses are included in the commission. 

Read more: Real estate commissions explained

How does the real estate commission get paid out? 

As the seller, you don't pay your agent directly. Once the sale closes and the buyer takes possession, you provide payment to your real estate lawyer, who transfers the funds to the listing brokerage. The brokerage then pays both agents – while taking a percentage for brokerage operations. (The amount depends on the brokerage and the agent.)

The cost of selling

When you’re selling your property, you’re probably focused on what you can get for it. But it’s also important to think about what you have to pay to make that happen. 

So what does it cost to sell a property in Toronto and the GTA? Let’s say you sell for $900,000. With that amount in mind, here’s a breakdown of your costs: 

What's an assignment sale?

An assignment is when the original buyer of a pre-construction property (who signed a contract with the builder) sells their contract to someone else before the purchase closes. Essentially, the buyer takes over for the seller in the contract and pays the deposit plus appreciated value/profit. 

Assignments happen for a number of reasons. Life changes are a big motivator – a lot can happen in the three to four years it takes to get from initial deposit to ownership. People decide to leave Toronto. They have babies, they get married, they get divorced. Some face financial difficulties that make them unable to close. 

Or they’re investors who never intended to close on the property in the first place. A popular investment strategy is to buy in an early release, let the property appreciate, then sell it before  having to shell out transfer taxes and HST and getting locked into a mortgage. (Though the rules around that are changing, so before investing in a pre-con unit, it’s good to know where you stand.)

The pros and cons of assignment sales

An experienced agent is a must-have

REALTORS who understand assignments can help you navigate the complexity of this type of transaction. And they will help you market it, despite any limitations that might be imposed by the builder: they can leverage their networks to spread the word about available units, find interested buyers and connect the two. 

Assignments can be daunting, but with a good lawyer and a knowledgeable agent, they can be a great financial move, helping you profit on your purchase before it closes.

Price, presentation, promotion: what sellers need to know right now

1. Pricing: get the number right 

See what has sold recently in your area and do a close comparison. And by recent, we mean days and weeks, not months. The market has been really up and down lately with the current economy and all the rate announcements, so be sure you’re comparing apples to apples. Your agent can help you narrow things down.

Pricing strategy matters in this market. When the market was super-hot, underpricing a home encouraged a bidding war, but doing that now isn’t a guarantee of success. These days, only specific types of homes – unique, renovated, in great locations, with great views on high floors, etc. – are likely to garner that kind of attention. 

2. Presentation: dial up the appeal 

“If you want to do well right now, your property needs to be a 10/10,” says Josh Benoliel, VP of Sales, Property.ca Inc. Brokerage. “As more listings hit the market this spring, buyers will have more to choose from – and they gravitate towards the showcase-ready homes.” 

Fix everything that needs to be fixed, ensure everything is spic and span (including the exterior), update the lighting and be willing to spend some money on staging.

3: Promotion: market the heck out of it

The more people see your listing, the better, so find an agent who will get it in front of as many eyes as possible. Todd’s top tip: work with a Property.ca agent – your listing will automatically be featured on condos.ca and/or property.ca, high-traffic sites that’ll get you amazing exposure. 

Ready to jump into the spring market? Get started by researching sold prices in your area on condos.ca (condos) or property.ca (all properties)

What are days on market (DOM) and why should I care?

Days on market (DOM) is the length of time from when a property is first listed to when an offer is accepted and a contract signed.

DOM in a buyers’ market

When the market is slower, properties naturally take longer to sell, so a higher DOM is often to be expected. So when there are more available listings than interested buyers, DOM is generally higher. 

DOM in a sellers’ market

Strong demand and low inventory mean homes get snapped up fast and for top dollar. There are a few reasons why a property might not sell quickly in a sellers’ market: it’s overpriced, in poor condition, in an unfavourable location, or it has unusually high maintenance fees. The longer it sits without selling compared to similar properties, the less likely buyers are to make an offer at or above asking price, or in some cases, to make an offer at all.

But whatever the market, there’s no hard and fast rule for how many days is too many. It really depends on your area, the property type, how it measures up to other homes in the area, what time of year it is, and what’s happening in the market. Your agent can help you figure all of that out. 

Keep your DOM low by pricing right the first time 

If your asking price is too high, and you refuse to adjust relatively quickly, your listings will be old news fast, and won’t sell for what it’s actually worth. A good agent will help you price strategically and counsel you on an asking price that will generate the greatest interest. 

Access DOM info and other useful search tools on condos.ca 

Sign up for access to sold history, demographic info, comparison tools, listing alerts and more.

Sellers' market vs. buyers' market: what's the difference?

What’s a buyers' market?

It's when there are more properties for sale than there are interested buyers. With less competition, prices drop, properties stay on the market longer, buyers can stipulate conditions, and sellers have to do a lot more in the way of marketing, staging etc. to attract buyers – and be willing to negotiate to make a sale happen. 

5 things you'll typically see in a buyers' market: 

1. Lower/more competitive prices

2. Offers under asking

3. Fewer offers

4. Conditional offers

5. Longer time on the market

What’s a sellers' market?

It's when there are more buyers than available properties. When supply is low, competition ramps up. Properties sell faster, for higher prices, and buyers are willing to do more (foregoing conditions, agreeing to shorter closing dates, offering more money and accepting properties “as is”) when they're competing with other bidders. 

5 things you'll typically see in a sellers' market: 

1. Higher prices

2. Fewer listings

3. Bidding wars/multiple-offer situations

4. Offer dates

5. Sellers turning down offers at (or even above) their asking price

Remember: markets differ from neighbourhood to neighbourhood

Toronto isn’t one market. It’s actually a  series of micro-markets that all behave very differently. So it’s very possible for some neighbourhoods to be in buyers’ territory while others favour sellers. And things can differ based on property type, too – whether you’re selling a condo, a house or a townhouse can make a big difference in demand. A little research and a knowledgeable agent will help you figure out where things stand in your area. 

If you're a seller in a buyers' market, don't panic. 

Don't sell if you don't have to, but if you do need to move, you can still get a good price by making your property stand out with great staging and marketing. You’ll probably have to adjust your expectations about what you can get for your property: be open to reasonable offers. And get advice from your REALTOR to come up with a strategy that works for this climate. 

If you're a seller in a sellers' market, you're in the driver's seat.

A good sales strategy will likely net you a great selling price without conditions. But that doesn't mean you should sit back and do nothing – good marketing and an agent with strong negotiating skills can help build interest in your property and maximize the price you can sell it for. 

Selling in a buyers’ market: 6 tips for success

Rising interest rates have cooled buyer demand in a big way. If you’re planning to sell soon, here are a few things to keep in mind: 

1. Adjust your expectations. 

For most areas, the days of multiple, way-over-asking offers are over. Talk to your agent to determine a price that will work for today’s buyers – and for you. Research recent sales in your neighbourhood to arrive at a price buyers may be more willing to pay. Also, be realistic about timing. While there are certain properties that will always be in high demand (the ones with the best views, layouts and locations) the less “special” listings will inevitably take longer to sell. 

2. Make your property super-appealing. 

Focus on outshining the competition and making buyers fall in love with your property. Professional staging with neutral colours and modern furnishings opens buyers’ eyes to the possibilities of a space. 

3. Market the heck out of it. 

Do everything you can to get noticed: professionally shot photos, 3D tours, listing videos, direct mail, newsletters to relevant buyers, printed feature sheets and brochures, targeted advertising, social media content and more. 

4. Get feedback. 

When potential buyers come for viewings but don’t make an offer, ensure your agent contacts them to find out why. It will help you get a better understanding of what buyers in your area or price range are looking for. 

5. Remember that you’re a buyer, too.

While you may get less for your home than you would have a few months ago when you sell, you’ll also probably pay less for what you buy – and you won’t have to compete with dozens of other buyers and completely destroy your budget to get a place. 

6. Don’t immediately reject a lower offer

“Those buyers might just be feeling you out to see if you’ll negotiate,” says Sean Miller, Sales Representative. “It’s the job of your listing agent to feel out the other side and see if that offer is a starting number or their best and final. If they’re just throwing numbers around to see if something will stick, that means there may be room for negotiation.” 

Read more: What do I do if I get a lowball offer? 

Want to see what properties in your area have sold for? Here’s how to search recently sold listings.

Pricing your property can make or break a sale. A good agent will know how to price strategically based on a number of considerations.

Setting the right price: 6 key factors

How do you decide on a number? Here’s a list of things Property.ca agents think about when coming up with a pricing strategy. 

Comparable sales. What have similar properties sold for recently in the area or the building? If a floor plan similar to yours has sold in the last few weeks, that selling price is a good starting point for what buyers would be willing to pay for yours. But agents don’t just look at sold prices. They look at current listings to see what other sellers are hoping to get – and expired listings, too, which give them a sense of which homes didn’t sell because they were priced wrong or marketed badly. 

Upgrades and renos. While it’s easy to compare two similar floor plans, you also have to look at any improvements that have been done to the unit. If your place has premium hardwood flooring and a brand new kitchen and the last sale had builder-grade everything, yours should be priced higher. Same thing applies the other way around: you can’t compare your unrenovated 15-year-old unit to one that has been fully redone. 

Market conditions. What’s happening in Toronto real estate will definitely impact how much you can sell your place for. A good agent will always be up on the state of the market so they can advise you accurately. 

Read more: Your definitive guide to the Toronto and GTA housing market 

Parking and locker. Having a parking spot and storage space can amp up your property value pretty significantly. 

Outdoor space. After being cooped up in our homes for so long during the pandemic, outdoor space is in huge demand: a unit with a balcony or terrace will almost certainly fetch more than a similar one without an outdoor area. 

Neighbourhood and building rep. Great schools, parks, restaurants and amenities will impact price too – as will a well-managed condo built by a reputable developer. 

2 pricing strategies to choose from
The one you go with will depend on market conditions in your area and your own comfort level.  

Option 1: List slightly above market value

This is the method we all knew and loved before the housing market went bananas. It’s very civilized: you list at a slightly inflated price to leave room for negotiation, buyers come back with an offer that’s slightly lower (but actually what you wanted) and everyone leaves happy. 

Your agent will be able to guide you through a pricing strategy that makes sense for your specific property and location.

Option 2: List below market value to attract multiple offers

In a strong sellers’ market where there are more interested buyers than available properties, competition can be fierce. This strategy takes advantage of that competitive landscape. 

By pricing low, you grab the attention of more buyers. Then you set a date when you’re accepting offers (generally about a week after the listing goes live) and review all of them at the same time. When buyers know there are other offers on the table, they are likely to offer more and drive up the price. 

This can be effective, but it can also be risky. Setting an offer date doesn’t guarantee multiple offers. If you only get one – or none – your property won’t sell, and you’ll likely have to relist at a higher price. Then you run the risk of your listing getting stale and sitting on the market. 

Read more: what is an offer date?

You want buyers to fall in love as soon as they walk in the door – and see the full value of your home right away. And that means making it look its absolute best: sparkling clean, well-maintained, uncluttered and beautiful. A good agent will make recommendations for improvements, decor and staging – and will have a network of dependable stagers, movers, storage companies, cleaners and contractors to help you get your property looking amazing. 

Here are some helpful tips to amp up buyer appeal – and inspire love at first sight. 

The importance of great marketing

The more people see (and love) your listing, the higher the chances of selling for a great price. And the best way to get their eyes on your listing? Marketing! 

But there’s a lot more to marketing your home than taking a couple of pictures and throwing them up on MLS. Good marketing means actively promoting your property with professional photos, virtual tours, 3D floor plans, appealing print materials, websites, social media and more. These days, online marketing is more important than ever: most buyers start their search online. If you don’t have great pics and videos to help them choose, they may pass you by. 

When you’re talking to your agent, ask how they’ll market your property: the stronger the marketing strategy, the better your chances of selling fast and for top dollar. 

#InsiderTip: Great online exposure makes your marketing work harder 

Marketing isn’t just about great photos and 3D tours – it’s about where you put them so the most buyers can find them. Access to buyers starts with top sites like condos.ca, which has a database of over a million users. That’s a lot of reach – and a ton of exposure. 

Download checklist

What is an offer?

Also known as an “Agreement of Purchase or Sale,” an offer is a written contract submitted by potential buyers outlining the following: 

1. The price they’re willing to pay

2. Details about their deposit 

3. Closing date

4. Irrevocable time and date (your deadline for responding) 

5. Any conditions, inclusions or exclusions

What to do when you get an offer?

Once a potential buyer submits an offer to buy your property, you and your agent will review it together. At that point, you have 3 choices: 

• Accept it. Saying yes will make the offer a legally binding contract that can only be cancelled if both parties agree. 

• Make a counter offer. If the price isn’t high enough or you don’t like certain terms or conditions, you can come back to them with changes. 

• Reject it. You are under no obligation to say yes to any offer, even if it meets or is higher than your asking price. 

The counter offer: how to negotiate the best deal

If an offer isn’t what you were hoping for, but you don’t want to reject it outright, you can start negotiations with a counter offer. The buyer will say yes, no, or come back with their own counter offer. There’s really no limit to how many times this can happen: you keep going until both sides are happy or someone decides to walk away.

3 ground rules for successful negotiation

• Be informed. Don’t go in expecting $100K over asking if a similar unit in your building or a comparable house down the street just sold for below your asking price. A good agent will give you a realistic picture of how much you can get. 

• Don’t play games with buyers. Be careful with how you treat them – trying to buy a home is an emotional experience, and if you behave badly, you’ll lose them. 

• Pick an agent that’s a proven negotiator. A pro who understands just how far to nudge buyers before losing them, has an arsenal of negotiation tactics and knows how to convince them of the value of the property – that’s a powerful ally to have in your corner. 

What should I expect if there are multiple offers?

If your agent thinks your home is likely to get more than one offer, they will likely suggest that you only accept offers on a certain day. That way, instead of looking at them as they come in and wondering if someone else would offer more down the line, you can compare all of them at once. This is a strategy that makes more sense in a high-demand market where it’s likely that you’ll have multiple buyers interested in your property. 

Your agent will field all offers and questions from prospective buyers, and once the deadline for submitting them has passed, present them to you. Together, you’ll decide if there’s one you want to accept or counter. If two or more of your highest offers are very close to each other, you may want to give those bidders another chance to improve, or you can counter their offers with a specific amount. 

What if I get a bully offer?

Buyers frustrated with losing multiple bidding wars may make bully offers, also known as a bully bid or pre-emptive offer. It’s when a buyer makes an offer before offer day, jumping the line with a firm bid that’s well above asking. The hope is that you will say yes because it's a particularly attractive offer, and because it’s easier for you to deal with than multiple showings and a storm of offers on the offer date. 

But how do you know you won’t do better on offer day? Well really, you don’t. Your best bet is to keep a close eye on what similar units are selling for. Sometimes a bully offer is the best price you'll get – but sometimes it's not, and having up-to-the-minute market knowledge can help you guess what kinds of offers might be waiting in the wings.

You also want to be sure that if you are accepting a bully bid, that it’s firm and sure to close. And, of course, lean on your agent for their insight – they’ve probably got plenty of experience with bully offers and bidding wars, and will be able to advise you on the right move. 

What if I get a lowball offer? 

When you’ve got an offer that’s way under asking, here’s what you need to think about. 

If you’re like many people, you might simply reject it outright. And that’s certainly your prerogative. But even a very low offer can be negotiated: consider it a starting point in a longer conversation. Don’t be insulted by it. If you don’t have a better offer on the table, make a counteroffer. It can’t hurt, and ultimately, you really never know where it could go. 

For one thing, that lowball could be a cultural thing: starting low is a completely accepted practice in many countries, and bargaining is expected. 

And in a market like this where there aren’t that many buyers and sellers are motivated? Those buyers might just be trying to see how motivated you actually are. It’s the job of your listing agent to “feel out” the other side and see if that offer is a starting number or if it's their best and final, and get a sense of how interested they are in the place. If they’re just throwing numbers around to see if something will stick, that means there may be room for negotiation. 

“I think that in this current market, we’re going to be seeing a lot more low offers, more negotiating and back and forth,” says Sean Miller, Sales Representative. “More supply will come on the market as people coming up for mortgage renewal have to sell, and buyers will have even more to choose from. So make sure you have a strong agent on your side who knows how to negotiate and will really fight for you.”

What’s the deal with open offers?

In December 2023, the Government of Ontario made some changes to the province’s real estate regulations. The new Trust in Real Estate Services Act (TRESA) is meant to increase transparency, encourage ethical behaviour, and avoid conflict of interest and fraud. The changes mostly impact agents (and the amount of paperwork we’re going to have to do!), but there is one big one that will affect buyers and sellers: open offers.

What is Ontario’s new open offer process all about? 

Before we go into that, let’s start with the way offers have been handed until now. Before the guidelines came into effect, if a seller got multiple offers, they couldn't reveal what those offers were to competing bidders. 

That process is called blind bidding. In it, you're making an offer on a home based on your agent’s guidance and what you can afford. But so are any other people who are interested in the property, so you don’t know what you’re up against. They could be following their agent’s recommendations and keeping their offers within the property’s actual value, or they could be getting emotional and making offers much higher than that. In those cases especially, it would be nice to know how much someone else is bidding so you can either try to win it or tap out and move on. 

When the market was hot, this type of bidding sometimes pushed prices higher and higher. Buyers tired of losing out on properties would offer aggressively high amounts and drive up not just the price of that property, but set the standard for similar ones in the area. 

Property.ca Inc.'s top-producing agent, Sean Miller, always counsels his clients to come up with a number where they’ll be okay walking away if the bidding gets too high – but also won’t have buyer’s remorse if they win it. 

People have been asking to bring transparency to this process for a long time. So the government came up with a compromise: they've introduced open bidding but made it optional. In other words, it's up to sellers to decide if they want to be open with bidders. 

Are open offers good for sellers? It depends. 

It's still unclear how all of this will play out. The market will certainly influence seller decisions, and experts predict we'll see more blind bidding when the market gets hot again. That said, there are also a number of advantages to showing buyers your hand.

Another benefit to a transparent approach? When buyers can see exactly how much more they'll need to offer to stay in the running, they'll be a lot less likely to walk away in defeat, thinking the final price will be way out of their range. 

Open offers could actually drive prices up

Although the new process is meant to curb big price jumps, it could potentially get sellers more for their properties than blind bidding. When bidders can see what they're up against, it basically becomes an auction – one that only ends when people stop bidding. Australia, which has an open auction-style system, has seen prices climb in ways similar to Canada.

Ultimately, time will tell what kind of difference open offers will have, how many sellers will actually use them, and whether buyers will find the new process beneficial or not. As with any new guidelines, it'll take a while to settle in since there are so many variables to each sale – nothing is that cut and dried.

What happens once I've accepted an offer?

You’ve gotten an offer you like…yay! So what’s next? 

The buyer pays the deposit. Typically, the deposit is 5% of the purchase price (though it can be more), and demonstrates that they’re financially capable and ready to commit. It must be submitted within 24 hours of you accepting the offer. The funds are then deposited in an account held in trust by your agent’s brokerage, and will go towards the down payment once the deal closes. 

You have to ensure conditions are met. If you accepted an offer that’s conditional on, say, something being repaired in the unit, that needs to happen before you close. However, conditions can be waived with written notification if both parties agree. 

Buyers can visit twice before closing day. They can come in once to take measurements, figure out where they’re going to put furniture and plan their move. Then they visit a second time, just before closing day, to do a walk-through and ensure the unit is in the same condition it was when they first saw it. 

You’ll meet with your lawyer. Once everything is ready for closing day, you’ll work with your lawyer to sign all the paperwork necessary to close the deal and transfer ownership to the buyer. 

Closing day. This is the final step in your sale — the day the new owner takes possession and the payment is transferred to you. Drop off the keys with your lawyer, and you’re done! 

Closing day checklist for sellers

• Cancel your home insurance. Don’t do this before the sale has closed to keep yourself protected. If you’re moving out more than 30 days before the new owner takes possession, your insurer will want to know it’s vacant. 

• Have all your utility meters read. By doing that on closing day, you’ll know exactly what you’re responsible for paying, and what the buyer should pay starting on the day they take possession. And cancel any pre-authorized home-related payments, too, so they don’t end up going through after you've moved out. 

• Be out by 5:00pm at the latest. The deal closes by the end of business day, and that’s when the buyer takes possession. 

Ask a tax expert: do I have to pay tax when I sell my house or condo?

CPA Nicholas Carriere from Chaggares & Bonhomme CPAs talks about the taxes you may be subject to when you sell.

Q: Do I have to pay tax when I sell? 

A: That depends on one key thing: whether you're selling your principal residence or an additional property. A principal residence (also known as a primary or main residence) is the home you live in most of the time. You can only deem one residence as your principal residence for a tax year.

When you sell a principal residence, you don't get taxed on the capital gains (the amount you've earned as the property has appreciated in value over time). However, you are still required to report the sale on your personal taxes in the year of the sale and indicate that it was your principal residence. If you own multiple properties, you can choose which one to designate as your principal residence: only one property can be sheltered for a specific tax year. 

Selling a property that ISN’T your principal residence – whether that's a vacation home, a house you rent out or a condo you bought for a family member to live in – is a whole different ballgame. For any property beyond your principal residence, you will be taxed on 50% of your capital gains when you sell. 

Q: How much tax will I end up paying on my capital gains?

A: It depends on your tax bracket. 50% of the capital gain gets added to your income (taxable capital gain) in the year you sold the property, which is likely to push you into a higher tax bracket than you’d normally be in. 

To minimize how much tax you pay, be sure to claim any improvements that have added to the total cost of the property. If, for example, you bought a backyard shed or did a kitchen reno, those costs can be added to the cost of the home and will help reduce the capital gain. Let’s say you bought a place for $750K, put in $250K worth of renos, then sold it for $1.25M. Because of those renos, your capital gains will only be $250K, and you would be taxed on $125K (50% of the total gain gets taxed) at your marginal tax rate.

Q: Are there any situations in which I WOULDN’T get a capital gains exemption on my principal residence? 

A: If you’re a flipper who buys, renovates and sells properties quickly, you may not be exempt from those taxes. According to the CRA, you have to show that you intended to live in the property, usually with the address on your driver’s license or utility bills, and that you ended up selling the property due to unforeseen circumstances (e.g. your family or work life changed).