Canada – Selling Property

What are the steps involved in selling property yourself in Canada?

Selling a home without an agent — commonly referred to as “For Sale By Owner” (FSBO) — means assuming all of the responsibilities that a realtor would ordinarily manage. This approach is legally permitted throughout Canada, although the precise steps and disclosure obligations differ from one province to the next. The following outlines the typical sequence for a private sale:

1. Prepare the property and establish a price. Review comparable sales in your area to arrive at a competitive and realistic asking price. Engaging a certified property appraiser for a formal valuation can help substantiate your figure with prospective buyers.
2. Assemble essential documents. The land title is the official record confirming ownership and the property’s history. Conducting a land title search is critical to verify that the property is free of liens or encumbrances and can be legally transferred. You should also gather any surveys, tax records, and strata or condominium documents where relevant.
3. Complete required disclosure forms. In most Canadian jurisdictions, sellers are legally obligated to disclose all known material defects or issues to prospective buyers. Failing to do so can expose you to legal action after completion, so it is worth obtaining advice on your specific province’s disclosure rules before proceeding.
4. List and advertise the property. When selling privately, you will be responsible for all marketing activities and for fielding enquiries and arranging viewings. Online portals, social media channels, and print advertising can all help maximise exposure. Flat-fee REALTOR.ca listing services give FSBO sellers access to Canada’s primary property portal without engaging a full-service agent.
5. Host showings and enter negotiations. Organise open houses and individual viewings, presenting the property in its best condition. Be prepared to negotiate on price and terms until both parties reach an acceptable agreement.
6. Accept an offer and execute the Agreement of Purchase and Sale. Once you agree to an offer, both parties sign a legally binding Agreement of Purchase and Sale, which sets out the sale price, the deposit, and the agreed closing date.
7. Engage a real estate lawyer. Irrespective of whether an agent is involved, Canadian law requires a lawyer — or a notary in Quebec and British Columbia — to manage the legal conveyancing, oversee the title transfer, and handle the movement of funds. While it is possible to minimise agent involvement, retaining legal representation remains strongly advisable.
8. Finalise due diligence and close the transaction. Your lawyer will arrange the transfer of title, register the change of ownership with the provincial land registry, and ensure that any outstanding mortgage and associated costs are discharged from the sale proceeds before releasing the net balance to you.

For straightforward guidance, the Financial Consumer Agency of Canada provides an accessible overview of the home-selling process, including relevant tax considerations.

Do most sellers in Canada use an estate agent, or is private selling common?

The Canadian property market is strongly oriented towards licensed real estate professionals known as REALTORS®, and the majority of sellers opt to work with one. That said, private selling is perfectly lawful, and a notable minority of sellers choose to handle the process independently.

When engaging a realtor, the seller pays a commission calculated as a percentage of the final sale price. This commission is negotiable but typically falls in the range of 2% to 6%, varying by location. In Ontario, for instance, commissions commonly range from 3% to 6% plus HST. Common motivations for going the private route include eliminating these commission costs, retaining direct control over showings and negotiations, and having greater flexibility in discussions without the influence of commission-driven incentives.

Selling independently means accepting full responsibility for every aspect of the transaction — scheduling viewings, handling negotiations, and managing all paperwork. This can be time-consuming, but the financial savings are a clear incentive for some sellers.

An important rule introduced in January 2024 affects how privately sold homes can be promoted. Under the REALTOR® Cooperation Policy, any property that is publicly marketed — via flyers, yard signs, email campaigns, or digital advertising — must be listed on the MLS® system within three calendar days. The intention is to give all prospective buyers an equal opportunity to participate. This means that genuinely off-market FSBO sales are limited to channels that do not constitute public marketing, which can significantly reduce a property’s visibility.

By comparison with markets like France or Spain — where notaries occupy a central administrative role and private listings are readily available through dedicated platforms — Canada’s property market is more agent-centred, with MLS® access historically conferring a meaningful advantage on those using a realtor. The emergence of flat-fee listing services offering FSBO sellers access to REALTOR.ca has narrowed this gap to some degree.

How does capital gains tax work when selling property in Canada?

Canada does not operate a standalone capital gains tax. Rather, capital gains form part of a seller’s annual taxable income and are taxed at the applicable marginal income tax rate. When a capital property is sold for more than its original purchase price, only a portion of that profit is brought into income for tax purposes.

This contrasts with jurisdictions such as the UK, which applies a separate fixed-rate capital gains tax. In Canada, the amount of tax payable depends on the seller’s overall income and the province in which they file. With a 50% inclusion rate and current federal and provincial income tax rates, no taxpayer currently pays more than 27% on capital gains (as of 2025).

Calculating capital gains: The adjusted cost base (ACB) represents the total cost of acquiring the property, encompassing the original purchase price alongside eligible expenses such as legal fees, commissions, and land transfer taxes. The ACB may also be increased by the cost of capital improvements — such as significant renovations — that permanently enhance the property’s value. Certain selling costs, including repair expenses, finders’ fees, commissions, brokers’ fees, surveyors’ fees, legal fees, transfer taxes, and advertising outlays, may be deducted from the proceeds of disposition when calculating the gain.

The inclusion rate: Under current federal rules, 50% of any realised capital gain must be included in taxable income for the year of sale; the remaining 50% is not subject to tax. As of March 21, 2025, the government confirmed that a previously proposed increase to the inclusion rate has been cancelled, meaning the rate remains unchanged from 2023 for 2024 taxes and going forward. Always verify the prevailing rate directly with the Canada Revenue Agency (CRA), as this has been subject to ongoing legislative discussion.

Principal residence exemption: A seller who realises a capital gain on their home may be entitled to full exemption from tax if the property served as their principal residence for every year it was owned. Since January 1, 2023, this exemption does not apply to properties held for fewer than 12 months. The sale must still be reported on the seller’s tax return even when the gain is fully sheltered by the exemption.

Investment and rental properties: The principal residence exemption reflects the fact that capital gains rules are primarily aimed at investment assets. Gains from the sale of investment properties, vacation homes, and land are subject to tax. Sellers who claimed capital cost allowance (depreciation) on a property may also face a recapture of those deductions, taxed as ordinary income in the year of sale.

Non-resident sellers: Non-residents are liable for Canadian capital gains tax on the sale of Canadian real estate at rates broadly comparable to those for residents. They are, however, subject to additional withholding requirements, which are addressed in the sections below. The CRA’s guidance for non-residents selling Canadian property should be consulted for the most up-to-date information.

Are there other taxes or costs involved in selling property in Canada?

Sellers in Canada should plan for a range of costs beyond their capital gains obligations. While several of these — including legal fees and realtor commissions — are common to most comparable markets, others are specific to Canada or to particular provinces.

• Realtor commission: Where a realtor is engaged, the seller pays a commission as a proportion of the final sale price. Commissions are negotiable but typically range from 2% to 6% depending on the location (as of 2025).
• Legal and notary fees: The services of a real estate lawyer or notary are required to complete the conveyancing. Fees generally fall in the range of CAD $1,500 to $2,500 or more, depending on the province and the complexity of the transaction (as of 2025). Confirm current rates with a licensed practitioner in your province.
• Land transfer tax: In Canada, land transfer tax is ordinarily borne by the buyer, not the seller. Understanding how this cost affects a buyer’s purchasing capacity can nonetheless inform your pricing and negotiating strategy. Rates differ by province — Ontario, for example, charges between 0.5% and 2.5% depending on purchase price, while British Columbia operates its own Property Transfer Tax framework.
• Mortgage discharge fees: If the property carries an outstanding mortgage, the lender will typically charge a prepayment penalty and an administrative fee to discharge the mortgage from the sale proceeds. Contact your lender for up-to-date figures specific to your situation.
• Staging and marketing expenses: Costs such as professional staging, photography, and advertising campaigns can add up and should be factored into your overall cost estimate.
• Property tax adjustments: Annual property taxes are generally apportioned between buyer and seller at closing on a pro-rata basis, so you may owe or receive a credit depending on payments already made for the year.
• GST/HST: The sale of a used residential property is generally exempt from HST (which combines the 5% federal goods and services tax with a provincial component of typically 8%). New builds or substantially renovated homes may, however, attract GST/HST — seek advice from the CRA or your lawyer to confirm your obligations.

Because rules and rates differ considerably across the country, it is advisable to consult a licensed Canadian real estate lawyer or notary for a complete breakdown of closing costs applicable in your province.

What legal requirements must sellers meet in Canada?

Canadian property sellers must observe a number of legal obligations, which can vary between provinces. The most consistently applicable requirements relate to disclosure of defects, title verification, and — for non-residents — compliance with tax rules.

Mandatory disclosure: Sellers are legally obliged to disclose all known material defects to prospective buyers, and a failure to do so can result in legal claims following completion. Disclosable matters typically include structural problems, water ingress, environmental hazards, and anything that would materially influence a buyer’s decision or affect the property’s value. Disclosure requirements and buyer due diligence expectations in Ontario have been strengthened as of 2025, underscoring the importance of thorough documentation. Unlike some European jurisdictions — such as France or Ireland — Canada does not currently impose a mandatory government-issued energy performance certificate requirement for residential resale properties, although local requirements may exist in certain provinces, so it is worth checking with your provincial authority.

Title and liens: The land title is the official document recording property ownership and its history. A land title search must be conducted to confirm that the property is unencumbered and may be lawfully transferred. This search will be carried out by your lawyer as part of the standard conveyancing process.

Non-resident obligations: Non-resident sellers are required to notify the CRA under Section 116 of the Income Tax Act. This notification must be submitted promptly — within 10 days of the sale date and ideally before closing — to prevent delays and the imposition of a substantial withholding by the buyer’s legal representative. A late filing penalty of $25 per day applies, up to a maximum of $2,500, even when no tax is ultimately owing.

Reporting the sale: Whether or not the sale generates a taxable gain, the transaction must be reported on an income tax return. Non-residents must file a Canadian tax return (Form T1) by April 30 of the year following the year in which the property was sold.

For authoritative guidance on legal obligations in your province, consult the relevant law society — for example, the Law Society of Ontario or the Law Society of British Columbia.

How does the exchange and completion process work in Canada?

The completion process in Canada differs from systems such as those in the UK or Ireland, where “exchange” and “completion” are legally distinct events separated by a defined period. In Canada, the two stages are managed more fluidly, centred on the closing date stipulated in the Agreement of Purchase and Sale.

Offer acceptance and conditions: Once an offer is accepted and the Agreement of Purchase and Sale is signed by both parties, the transaction enters a conditional period. Typical conditions include mortgage approval, a satisfactory home inspection, and the prior sale of the buyer’s existing property. The resolution period for conditions usually spans several days to a few weeks.

Role of the lawyer or notary: Real estate lawyers manage the legal procedures and documentation involved in transferring ownership. In Quebec, the use of a notary is a statutory requirement for property transfers. In British Columbia, either a lawyer or a notary public may handle the conveyancing. Your lawyer will review the title, prepare transfer documentation, manage the deposit, and oversee the distribution of funds on closing day.

Closing day: On the agreed closing date, your lawyer receives the purchase funds from the buyer’s legal representative, settles any outstanding mortgage and associated costs from the proceeds, and releases the remaining balance to you. The title is then formally registered in the buyer’s name at the provincial land registry. Unlike the UK system, there is no distinct “exchange of contracts” event in Canada — the signed Agreement of Purchase and Sale itself constitutes the binding obligation once all conditions have been satisfied or waived.

Typical timeline: From accepted offer to completion, most standard Canadian residential sales take between 30 and 90 days, though longer closing periods can be negotiated. Non-resident sellers should build in additional time to account for the CRA Clearance Certificate process, which typically takes 4–6 months from submission of the T2062/T2062A compliance request to issuance of the certificate (as of 2025).

Is property exchange or part-exchange an option in Canada?

Direct property exchange — where a seller swaps their home for another property rather than proceeding through a conventional cash sale — is neither a standard practice nor widely used in the Canadian residential market. No dedicated national legal framework specifically governs residential property swaps in the way that cash transactions are regulated.

Property exchanges can occur as private arrangements between two consenting parties and are occasionally seen in specific contexts such as farm or rural land deals, or in commercial real estate. In practice, these arrangements remain uncommon, largely because mortgage lenders and title insurers in Canada have built their processes around cash-based transactions, making property swaps logistically complicated.

A more frequently encountered alternative is the conditional sale, whereby a buyer’s offer is subject to the prior sale of their existing home. This achieves some of the practical coordination of a property swap without requiring a formal legal exchange of properties.

Any foreign seller considering a property exchange arrangement in Canada should retain a Canadian real estate lawyer before proceeding, to ensure the agreement is properly structured, that title passes correctly between parties, and that all applicable tax obligations — including capital gains reporting — are fully addressed. The CRA treats a property exchange as a deemed disposition — that is, a taxable event — in exactly the same manner as a cash sale.

What should foreign sellers know about repatriating sale proceeds from Canada?

Canada imposes no general foreign exchange controls, and there are no restrictions on moving money out of the country once all tax obligations have been discharged. However, non-resident sellers must navigate several important steps before their sale proceeds are free to leave Canada.

Withholding tax and the Clearance Certificate: When a non-resident sells Canadian property, the buyer is legally required to withhold a portion of the gross sale price as a safeguard against potential tax liabilities. With effect from January 1, 2025, this withholding rate increased from 25% to 35%. To avoid this amount being held back, the seller must obtain a Clearance Certificate from the CRA. Given that this area has been subject to ongoing legislative change, always confirm the current rate with a Canadian tax professional.

A Clearance Certificate confirms to all parties that sufficient tax has been remitted to the CRA and that the sale proceeds may be transferred out of Canada. A request for a Certificate of Compliance under Section 116 of the Income Tax Act can be used to reduce the required withholding to 35% of the capital gain, rather than 35% of the full gross sale price — a potentially significant financial difference.

Non-resident sellers are also required to file a Canadian income tax return to report the sale. In many instances, the tax calculated on the return will be lower than the amount originally withheld, resulting in a refund from the CRA.

Tax treaties: Canada retains the right under both its domestic tax legislation and most bilateral income tax treaties to tax the sale of Canadian real estate. Canada has treaties with numerous countries — including the UK, the US, Australia, France, Germany, and many others — that may provide relief from double taxation. Consult the Government of Canada’s tax treaties page and seek guidance from a tax adviser in your country of residence to understand how Canadian tax paid can be offset against any liability at home.

Transferring funds internationally: Once the Clearance Certificate has been obtained and the final tax return filed, there are no capital controls preventing you from remitting the net proceeds abroad. Specialist currency transfer services can often offer more competitive exchange rates than high-street banks on large sums. Ensure that any provider you use is regulated in Canada — the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) oversees anti-money-laundering compliance for money transfer businesses. Large international transfers may also trigger reporting obligations under Canada’s anti-money-laundering regulations.

Frequently asked questions

How long does the process typically take from listing to completion in Canada?

A standard Canadian residential sale generally takes between 30 and 90 days from an accepted offer through to closing. The time required to find a buyer and market the property can add further weeks or months depending on local conditions. The Section 116 Clearance Certificate application can take 4–6 months to process in full, so non-resident sellers should plan their timeline carefully and consider scheduling their closing date with sufficient lead time to accommodate this.

Can I sell my Canadian property remotely, without being present in Canada?

Yes, it is entirely possible to sell Canadian property from abroad. A seller can grant a trusted representative a Power of Attorney, authorising that person to execute documents and manage the transaction on their behalf. Your Canadian real estate lawyer can draft the Power of Attorney and advise on whether it must be notarised or apostilled in your country of residence. Non-resident sellers should also be ready to liaise with the CRA and their Canadian lawyer remotely throughout the process.

What happens if the buyer pulls out of the purchase in Canada?

If a buyer withdraws after all conditions have been waived and the Agreement of Purchase and Sale has become firm, they are typically in breach of contract. The seller may be entitled to retain the buyer’s deposit — usually between 1% and 5% of the purchase price — and may also have grounds to pursue further damages. Where the buyer withdraws during the conditional period — for instance, because mortgage financing was not approved — the sale is generally cancelled and the deposit returned to the buyer. Always seek advice from your real estate lawyer in relation to the specific terms of your agreement.

Do I need a home inspection before selling in Canada?

Sellers are under no legal obligation to commission a home inspection prior to listing their property. That said, a pre-listing inspection can be a useful way to identify and resolve known issues before buyers raise them, potentially facilitating a smoother transaction. Buyers frequently include a home inspection condition in their offers, so having documentation readily available can be advantageous. Regardless of whether a formal inspection is undertaken, the legal requirement to disclose known material defects applies in most provinces.

Are there any restrictions on who can buy my property in Canada?

The Prohibition on the Purchase of Residential Property by Non-Canadians Act remains in force until January 2027. It does not affect Canadian citizens or permanent residents but restricts non-Canadians from purchasing residential properties — including detached houses, semi-detached houses, condominium units, and similar dwellings — either directly or indirectly. As a seller, this means that your pool of eligible buyers for residential property may be limited when marketing to non-Canadian purchasers. Review the current rules at Canada.ca or with your real estate lawyer, as these provisions may be amended.

Can I sell a Canadian property if it has been rented out?

Yes, but the sale of a rental property is taxable in Canada and will not qualify for the Principal Residence Exemption in respect of any years during which it was rented. Non-resident sellers who have been renting out the property must also confirm that all annual withholding tax filings for rental income have been submitted to the CRA before making a Clearance Certificate application. Full compliance with all outstanding filings is required before a Certificate of Compliance can be issued.

Is there a “flipping tax” if I sell quickly in Canada?

Since 2023, any profit arising from the sale of real estate held for less than one year is treated as business income rather than a capital gain. This distinction is significant: business income is subject to a 100% inclusion rate — meaning the full amount is taxed at your marginal rate — rather than the 50% inclusion rate that applies to capital gains. In addition, certain provinces such as British Columbia have introduced their own property-flipping taxes. Sellers disposing of property in BC after December 31, 2024 may be liable for the BC home flipping tax. Consult a local tax professional to confirm the rules applicable in your province.

What taxes might I owe in my home country when selling Canadian property?

Depending on where you are resident for tax purposes, you may face capital gains tax — or its local equivalent — in your home country on the profit generated from selling Canadian property. Canada has concluded tax treaties with a wide range of countries, and these treaties typically allow tax paid in Canada to be credited against the equivalent liability at home, thereby preventing double taxation. Given the complexity that arises from the interaction between two different tax regimes, it is essential to consult a tax adviser with cross-border expertise in both Canada and your country of residence well before the sale is completed.