1. What is Realtor Commission?

Realtor commission is the fee paid to real estate agents for their services in buying or selling a property. In Ontario, this is typically a percentage of the final sale price of the property.

2. How Commission is Calculated

The basic commission formula is:

In Ontario, you must also add 13% HST to the commission amount.

3. Typical Commission Rates in Ontario

Standard Rates: Typically 3-5% of the sale price, though this is negotiable. The rate is usually split between the buyer's and seller's agents.

Example: On a $500,000 home at 5% commission, the total would be $25,000 + $3,250 HST = $28,250.

4. Using the Calculator

Tips: Enter the sale price in CAD and the commission rate as a percentage (e.g., 5 for 5%). The calculator will show the commission amount, HST, and total payable.

5. Frequently Asked Questions (FAQ)

Q1: Is the commission rate fixed in Ontario?
A: No, commission rates are negotiable between the seller and the real estate agent.

Q2: Who pays the realtor commission?
A: Typically the seller pays the commission, which is then split between the seller's and buyer's agents.

Q3: Are there alternatives to traditional commission?
A: Some brokers offer flat-fee or discounted commission models, especially for higher-value properties.

Q4: When is the commission paid?
A: Commission is paid at closing, deducted from the sale proceeds.

Q5: Is commission tax deductible?
A: For sellers, it's typically deducted from the capital gain. Investors may be able to deduct it as an expense.