Cost of Selling a House in BC: Commission, Fees & Taxes

The price on the contract isn’t what you walk away with. Between commission, legal fees, your mortgage, adjustments and moving, selling a home has real costs, and a few tax questions are worth settling before you list. Here’s what to budget for when you sell in British Columbia.

Commission

There’s no standard commission in BC. BCFSA, the province’s real estate regulator, is clear that the amount is negotiated between you, your REALTOR® and their brokerage, and either side can say no. It’s usually a percentage of the sale price, but a flat dollar fee can be agreed instead. One thing isn’t allowed: a commission set as the difference between the list price and the sale price.

Your listing agreement sets out the commission and how it’s shared with the buyer’s brokerage. When an offer arrives, your agent shows you, in dollars, what goes to each brokerage. GST applies to the commission. Ask what the commission includes: photography, staging advice, marketing and how offers will be handled are part of what you’re paying for.

Legal or notary fees

You’ll need a lawyer or notary to complete the sale: preparing the transfer documents, paying out your mortgage and any other charges on title from the sale proceeds, and sending you the balance. Get a quote early, and ask whether it includes disbursements such as title searches and courier fees.

Your mortgage

Your mortgage is paid out on completion. If you’re partway through a term, there may be a prepayment penalty. For most fixed-rate mortgages it’s the higher of three months’ interest or the interest rate differential (IRD), and the IRD can be much larger. Ask your lender for a written payout statement before you list, so there are no surprises, and ask whether you can port the mortgage to your next home instead. If you’re buying and selling at once, see Selling and buying at the same time for bridge financing and porting.

Adjustments on completion

Property taxes, utilities and, for a strata home, strata fees are adjusted to the completion date. If you’ve prepaid the year’s property taxes, the buyer reimburses you for the rest of the year; if you haven’t, you pay your share. Your lawyer or notary prepares the statement of adjustments.

Getting the home ready

Cleaning, small repairs, painting, staging and sometimes a pre-listing inspection all cost money, and the best of them pay for themselves. Spend where buyers will notice, and fix anything an inspection would flag anyway. For what’s worth doing, see Preparing a West Vancouver home for sale.

Moving

Movers, storage if your dates don’t line up, and sometimes short-term accommodation. Agreeing on completion and possession dates that suit your move can save more than any of these.

Taxes to check before you list

Selling your principal residence

If the home was your principal residence for every year you owned it, the gain is generally not taxed. But you still have to report the sale on your income tax return for the year you sell it, on Schedule 3, and designate it as your principal residence on Form T2091(IND). If you forget, the Canada Revenue Agency can accept a late designation, but a penalty may apply.

Selling a rental or second home

If the property wasn’t your principal residence for every year you owned it, part or all of the gain is a taxable capital gain. Talk to your accountant before you list.

Selling soon after you bought

Under the federal residential property flipping rule, profit on a home owned for less than 365 days is generally taxed as business income, without the principal residence exemption, unless a life-event exception applies. And BC’s home flipping tax applies to profit on a property owned for less than 730 days. See BC’s home flipping tax, explained.

If you’re not a resident of Canada

Non-resident sellers must notify the Canada Revenue Agency of the sale within 10 days, and should apply for a certificate of compliance. Without one, the buyer must hold back a portion of the price, generally 25%, to cover the tax. Start this with your lawyer or accountant before you list; it takes time.

What you don’t pay

Property transfer tax is paid by the buyer, not the seller.

Questions people ask

Is commission negotiable?

Yes. There’s no standard rate in BC, and the commission and what it includes are agreed before you sign a listing agreement.

Do I pay tax when I sell my home?

Not usually on a principal residence you’ve lived in for every year you owned it, but you must still report the sale. Rentals, second homes and quick resales are different.

When do I receive the money?

On completion, your lawyer or notary pays out your mortgage, the commission and any other charges from the proceeds, then sends you the balance.

General information for sellers in British Columbia, current as of publication. It’s not tax or legal advice. Confirm your situation with your accountant and your lawyer or notary.

What it really costs to sell a home in BC