The money side of downsizing in Ontario

What it costs to sell a home in Ontario

Who pays which cost is set by the agreement of purchase and sale and by local custom, and some of it can be negotiated. These are the costs a seller should expect to see.

The net proceeds calculator applies commission plus HST to your price, and estimating net proceeds walks through the rest.

Sources: CRA, GST/HST special cases; Financial Consumer Agency of Canada, prepayment penalties; Law Society of Ontario, two-lawyer requirement; Condominium Authority of Ontario, status certificates.

Land transfer tax in Ontario, including Toronto

Land transfer tax is payable by the buyer on the value of the consideration, which includes a mortgage or other debt taken over, not only cash. A seller pays none on the home being sold. If your downsizing plan includes a purchase, this is the figure to budget for.

A home in the City of Toronto also carries the Toronto Municipal Land Transfer Tax. Up to $2,000,000 its rates match the provincial ones, so the two amounts are equal and a Toronto buyer pays double. For one or two single-family residences, graduated municipal rates above $2,000,000 took effect on April 1, 2026, starting at 2.5% to $3,000,000 and rising to 4.40% to $4,000,000 and higher bands beyond that; the full table is on the calculator page.

Refunds. Ontario refunds up to $4,000 and Toronto rebates up to $4,475 for first-time buyers. Both require that you have never owned a home anywhere in the world, so a downsizer who has owned before will not qualify. Anyone who does qualify has 18 months from the transfer to apply.

New homes. If you buy from a builder between April 1, 2026 and March 31, 2027, the Ontario Enhanced New Housing Rebate can return the full 8 percent provincial part of the HST on homes up to $1 million. Higher prices get less. Check the CRA page for your price and ask the builder how the rebate is handled at closing.

The guide to land transfer tax in Ontario goes further.

Sources: Ontario.ca, calculating land transfer tax; Ontario.ca, first-time homebuyer refunds; City of Toronto, MLTT rates and fees; City of Toronto, MLTT rebates; CRA, Ontario Enhanced New Housing Rebate.

Selling your home and the principal residence exemption

If the property was solely your principal residence for every year you owned it, you generally pay no tax on the gain. The exemption is not automatic: since 2016 the Canada Revenue Agency allows it only if you report the sale and the designation on your tax return, using Schedule 3 and Form T2091(IND).

• One home per family unit per year. Only one property can be designated for any year since 1982. The "plus one" rule can cover both the year you sell and the year you buy.
• Part of the home earns income. If you rent out or run a business from part of it, the sale price is split in proportion and the gain on that part is reported.
• Sales within 365 days. A housing unit owned for less than 365 consecutive days before the sale is treated as flipped property. The profit is business income and the exemption does not apply, with exceptions for life events such as a death, a family change, a move for work or illness. This applies to sales on or after January 1, 2023.
• Inclusion rate. The share of a taxable capital gain that counts as income is one-half, 50 percent. The proposed increase to two-thirds was cancelled in March 2025. It matters only for gains the exemption does not cover.

Whether a gain affects income-tested benefits such as the Guaranteed Income Supplement is a question for Service Canada, not something this page can answer. Interest earned on sale proceeds is a separate matter that your accountant can model. More in capital gains and selling your principal residence.

Sources: CRA, principal residence and other real estate; Prime Minister's Office, March 21, 2025.

Property tax relief for older homeowners

Relief comes from three levels: federal and provincial programs paid through your tax return, and municipal programs you apply for with your city or region. Eligibility often depends on owning and living in the home, so ask what changes when you move.

Ontario Senior Homeowners' Property Tax Grant

The grant is the lesser of $500 and the eligible property tax you paid, for the 2025 tax year and paid in the 2026 benefit year. You must be 64 or older on December 31, 2025, be an Ontario resident, and own and live in the home. It is reduced by 3.33 percent of income above $35,000 for a single person or $45,000 for a couple, and ends at $50,000 for a single person or $60,000 for a couple.

Ontario Energy and Property Tax Credit

This credit, paid through the Ontario Trillium Benefit, is worth up to $1,307 for non-seniors and up to $1,488 for seniors for the July 2026 to June 2027 benefit year. Owners who pay property tax on a principal residence can claim the property tax part, up to $1,198 for a senior. The CRA page explains how the amount is worked out for your income.

Note that no program is called the "Ontario Seniors Property Tax Credit". These two are the ones to look for.

Municipal deferrals and cancellations

Upper-tier and single-tier municipalities must pass a by-law offering deferral or other relief from reassessment-related increases for low-income seniors or disabled owners. Each municipality sets its own details.

• Toronto offers a Property Tax Increase Cancellation and an Increase Deferral. The cancellation requires household income of $62,000 or less, a residential assessment under $975,000, and age 65 or older (or 60 to 64 and on the Guaranteed Income Supplement) or a disability benefit. The deferral has similar income and age tests. You must have owned and lived in the home for at least a year before October 31, 2026, and you reapply each year; the 2026 deadline is November 2, 2026.
• Hamilton offers a deferral of the tax increase with no interest while you stay eligible, repayable on sale. The owner or spouse must be 65 or older by January 1, 2026, or on a qualifying disability benefit, with combined income of $44,568 or less, and must have owned the home for a year. Accumulated deferrals are capped at 40 percent of assessed value.
• Everywhere else, check your own municipality's tax page or call it. Figures and dates change each year.

Property assessments are still based on the fully phased-in January 1, 2016 value, because the province-wide reassessment was postponed. A change of owner does not by itself trigger a new market valuation, although the Municipal Property Assessment Corporation still updates a property that is built on, renovated or demolished. Your tax bill also depends on your municipality's rates.

Sources: CRA, OSHPTG; CRA, OEPTC; Ontario.ca, municipal fiscal context; City of Toronto, tax and utility relief; City of Hamilton, tax assistance; MPAC, notices.

Ontario Seniors Care at Home Tax Credit

If you or your spouse is 70 or older, this refundable credit covers 25 percent of up to $6,000 of medical expenses, so the most it pays is $1,500. It shrinks by 5 percent of family net income over $35,000 and is gone at around $65,000. The earlier Seniors' Home Safety Tax Credit applied to the 2021 and 2022 tax years only, and this credit replaced it. Two federal credits may also matter if a new home needs changes: the Home Accessibility Tax Credit for people 65 or older, which covers up to $20,000 of eligible expenses a year, and the Multigenerational Home Renovation Tax Credit, up to $7,250 per claim for a self-contained secondary unit for a senior or disabled adult relative. See aging in place or moving for how these fit the decision.

Sources: Ontario.ca, Seniors Care at Home Tax Credit; CRA, home accessibility expenses; CRA, MHRTC.

Selling a parent's home: probate and Estate Administration Tax

Ontario charges an Estate Administration Tax when an estate certificate is applied for. Nothing is payable on estates of $50,000 or less. Above that it is $15 for every $1,000, or part of $1,000, of the estate's value; a $240,000 estate owes $2,850. If the deceased owned real property it must usually be handled through an estate trustee, and a certificate of appointment should be in hand before anyone signs an agreement of purchase and sale. For tax purposes the deceased is treated as having sold everything just before death, and a home may still qualify for the principal residence exemption if the forms are filed with the final return. A spousal rollover is available where property passes to a resident spouse or common-law partner.

Read helping a parent sell their home before listing, and speak to an Ontario estate lawyer.

Sources: Ontario.ca, Estate Administration Tax; Ontario.ca, apply for probate; CRA, capital gains on a final return.

Next steps

Put these numbers to work in the step-by-step Downsizing Guide and the net proceeds calculator, or contact us with an agent on the operating team at eXp Realty.