In short
Your net proceeds = sale price, minus the commission and its taxes (as an example: 5% on $500,000 = $25,000 + $3,744 of GST/QST in Quebec), minus the mortgage balance and its discharge, minus the seller's documents (up-to-date certificate of location or survey) — plus the tax adjustments in your favour. No law sets the commission: everything is negotiated, in writing, before signing. On our example, with a $300,000 balance: net proceeds of about $168,750.
Net proceeds: what really comes out of the sale price
The listed price is not what you pocket. Between the sale price and the final cheque, four deductions apply: the brokerage commission and its taxes; your mortgage balance, paid off at closing out of the sale proceeds; the discharge fees (removing the mortgage from the registry, plus a possible break penalty if you sell before the end of your term); and the seller's documents — in Quebec, an up-to-date certificate of location, required by the buyer and their lender.
As an example, a $500,000 sale with a 5% commission, a $300,000 balance and about $2,500 of fees (discharge, documents) leaves net proceeds of about $168,750. The calculator below runs the math with your numbers.
The commission: negotiable, taxable, shared
Three things too many sellers discover late. No rate is set by law: the commission is freely negotiated and written into the brokerage contract — rates in the 4 to 5% range are common, but those are orders of magnitude, not rules. It is taxable: GST + QST in Quebec (14.975% on the commission), HST or GST elsewhere depending on the province — on our 5% example, that is $25,000 of commission plus about $3,744 in taxes. It is generally shared between the seller's broker and the one who brings the buyer: a rate set too low can reduce cooperating brokers' interest in showing your property — it is a marketing parameter, not just an expense.
So the question to ask before signing is not only "what is your rate?", but "what does that rate pay for": marketing, photos, exposure, the cooperating split. That is exactly what our guide to choosing a real-estate broker helps you assess.
Interactive tool
Your net proceeds, in 20 seconds
Enter the price, the agreed commission and your balance: the calculator returns the commission with taxes and your estimated net.
The commission is freely negotiable — the rate you enter is yours, not a norm. Excludes tax adjustments (often in the seller's favour) and capital-gains tax if the property is not your principal residence. For guidance only.
The seller's costs people forget — and that delay sales
The discharge. Your mortgage is registered against the property; removing it after payoff involves lender and legal fees. The break penalty. If your mortgage term is not over, early payoff triggers the penalty in your contract (three months' interest or the rate differential) — sometimes thousands of dollars, to be quantified BEFORE accepting an offer. The certificate of location (Quebec) — or an up-to-date survey elsewhere: if it is old or the property has changed (shed, pool, fence), the buyer will require a current one, at the seller's expense — and surveyors have lead times: ordering early avoids delaying the closing. The adjustments: municipal and school taxes paid in advance are reimbursed to you pro rata — an amount that works in your favour, calculated at closing.
Frequently asked questions
What is a real-estate broker's commission rate?
No rate is set by law: the commission is freely negotiated and written into the brokerage contract. Rates in the 4 to 5% range are common, but those are orders of magnitude — the rate, what it covers and the split with the buyer's broker are discussed before signing.
Who pays the brokerage commission?
The seller, out of the sale proceeds, at closing. It generally compensates both brokers (the seller's and the one who brings the buyer), according to the split in the brokerage contract.
Is the commission taxable?
Yes. In Quebec, GST (5%) + QST (9.975%) are added to the commission — 14.975%. On a $25,000 commission, expect about $3,744 in taxes. Elsewhere in Canada, HST or GST applies depending on the province.
How do I calculate my net sale proceeds?
Sale price, minus the commission and its taxes, minus your mortgage balance (and the penalty if your term is not over), minus discharge and document fees (certificate of location in Quebec), plus the tax adjustments in your favour. This page's calculator runs the math in 20 seconds.
The commission rates cited are negotiable orders of magnitude; applicable taxes vary by province. Confirm your situation with a licensed professional.
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