Downsizing in the GTA: How Much Cash You Actually Keep After Every Cost

Direct answer: On a worked GTA example — selling a $900,000 detached home and buying a $580,000 condo — the seller keeps roughly $255,000 in cash after the purchase price and every cost on both sides. The gap between the $320,000 price difference and the cash you actually keep is commission plus HST, legal fees, prep, moving and paying land transfer tax again on the condo.

Downsizing is often described as "cashing out." The honest version is "cashing out, minus a list." This guide costs that list line by line using a published GTA worked example, so you can plan the move with real numbers instead of a hopeful guess. Commission in Ontario is negotiable — the rate in the example is an illustration, never a fixed fee.

The Worked Example: $900,000 Detached → $580,000 Condo, Fully Costed

Here is the full example from a published GTA downsizing budget (Money.ca), with both sides of the move in one place. Your prices and costs will differ, but the structure — and the items most people forget — will look very much like this.

Read the tables together: a $320,000 difference in prices became roughly $255,000 in kept cash. Nothing on either list is unusual or wasteful — these are ordinary costs of an ordinary move. The planning mistake is not paying them; it is discovering them after you have already promised the difference to a renovation, a gift to family or a retirement plan.

Before you list, rebuild this table with your own home's realistic price and your target home's realistic price. If the kept cash still does what you need — clears debts, tops up savings, cuts your monthly costs — the move works. If it does not, better to know now than at the lawyer's office.

Selling Costs That Shrink the Cheque (Commission + HST, Legal, Prep)

Commission is normally the largest selling cost, and two things about it are consistently under-explained. First, commission is negotiable in Ontario — there is no fixed rate, and the 4% used in the worked example is simply the example's assumption. Discuss the rate, what it includes and how it is split before you sign a listing agreement. Second, HST applies on top of commission, which is why the example shows $36,000 becoming $40,680 out of the cheque.

Legal fees on the sale are comparatively modest — about $2,000 in the example — but they are not optional. Your lawyer discharges the mortgage, handles the transfer and makes sure the proceeds land where they should. Budget for it rather than treating it as a surprise on the statement of adjustments.

Prep is the flexible line: repairs, staging and moving at roughly $12,000 in the example. Some of that spending earns its way back in presentation; some is simply the cost of moving a household. If you are deciding where prep money actually pays, see How to Increase Your Property Value. The rule for downsizers is stricter than for other sellers: spend only where it protects the price or speeds the sale, not on upgrades you will never get to enjoy.

One tax point works in your favour. The principal-residence exemption generally shelters the gain on a home you have owned and lived in throughout, so most long-time owner-occupiers do not pay capital gains tax on the sale. Confirm your own situation if the home was ever rented or used partly for business.

Buying Costs Downsizers Forget (Yes, You Pay Land Transfer Tax Again)

The most common downsizer surprise is land transfer tax on the new home. There is no downsizer exemption and no credit for the tax you paid decades ago on the home you are selling. Buy a $580,000 condo outside Toronto and Ontario land transfer tax is roughly $8,000, payable in cash at closing. Buy inside Toronto and the municipal tax applies as well, because Toronto charges its own land transfer tax on top of the provincial one.

Legal fees apply on the purchase too — about $2,000 in the example — along with the ordinary closing items any buyer faces. None of these are large beside the purchase price, but together they are exactly why the kept cash is lower than the headline price gap.

If the next home is a condo, add one more review step before you firm up: the status certificate. It shows the building's finances, reserve fund and any special assessments coming — costs that land on you after closing if you miss them. See Toronto Condo Status Certificate: 9 Red Flags to Check Before You Buy before you waive conditions on any condo purchase.

Build your budget as cash-to-close on both sides: sale proceeds minus selling costs, minus purchase price, minus purchase closing costs. If a number is not on that page, it does not exist — and neither does the surprise.

Bungalow, Townhouse or Condo? Comparing Your Next Home Honestly

A bungalow keeps everything on one level and usually keeps a yard and a driveway. It is the closest thing to your current life, minus the extra bedrooms. The trade-offs: bungalows are a sought-after, limited slice of GTA stock, and you still carry full maintenance, roof, furnace and outdoor work yourself.

A townhouse cuts size and often cost, while keeping a small outdoor space and a more house-like feel. Many townhouses are condominium townhouses, which means monthly fees and rules alongside the lower upkeep. Freehold towns avoid the fee but keep more of the maintenance on you.

A condo apartment is the biggest lifestyle change and usually the biggest release of cash in a downsize like the worked example. Exterior maintenance disappears, amenities arrive, and you can lock the door and travel. In exchange you accept monthly condo fees, building rules and less space — and the monthly-cost test in the next sections becomes essential, because a condo is not automatically the cheapest way to live.

Judge each option against your actual reasons for moving: stairs, upkeep, health, travel, family proximity or cash. The right next home is the one that solves the problem you actually have, at a monthly cost you have actually calculated.

Sell First or Buy First in a 51-Day Market?

In September 2026, GTA homes took an average of 34 listing days on market and 51 property days on market to sell. That pace changes the sell-first-or-buy-first decision. Buying first is calmer — you choose your next home without a deadline — but it means carrying two homes if your sale takes the full 51 days or longer, and bridge costs and stress come with that.

Selling first gives you a certain number. You know exactly what you kept, what you can spend and what closing date you need, and you shop as a buyer with money confirmed. The risk is the mirror image: your home sells on schedule and the right smaller home has not appeared yet, leaving a gap to bridge with family, a rental or storage.

Many downsizers reduce the risk rather than choosing a side: ask for a longer closing on the sale, start serious condo or bungalow shopping before listing so the shortlist is real, and know your fallback before you sign anything. Market timing affects both sides of that plan — see Why Now is the Best Time to Sell Your Home.

Whichever order you choose, decide it on paper with dates and costs, not on optimism. A 51-day market rewards sellers who plan the second move before they trigger the first one.

The Monthly-Cost Test: Fees, Taxes, Utilities — Before vs After

Downsizing cuts space. It does not always cut monthly cost — and this is the test most movers skip. Condo fees after downsizing commonly run $450 to $950 or more per month. That single line can be larger than the property tax and utility savings from leaving a detached home.

Write the before-and-after columns honestly. If the new home costs the same each month but releases $255,000 of cash and removes the stairs and the yard work, the move may still be exactly right — as long as you chose it with open eyes. The failed downsizes are the ones where the fee letter arrives after closing and rewrites the retirement budget.

Also look ahead, not just at month one. Fees, taxes and utilities all move over time. A next home that only works if nothing ever increases is not a downsizing plan; it is a hope.

FAQ: Downsizing in Ontario

How much cash do I actually keep when I downsize?

It depends on both prices and both sets of costs. In the worked example — selling at $900,000 and buying at $580,000 — selling costs of about $55,000 and buying costs of about $10,000 left roughly $255,000 from a $320,000 price gap. Rebuild the same table with your own numbers before deciding.

Do downsizers pay land transfer tax on the new home?

Yes. There is no downsizer exemption from land transfer tax in Ontario. On a $580,000 purchase outside Toronto, Ontario land transfer tax is roughly $8,000, paid in cash at closing. Buying in Toronto adds the municipal land transfer tax on top. Include it in your cash-to-close budget from the start.

Is real estate commission fixed in Ontario?

No. Commission is negotiable in Ontario — there is no fixed or standard rate. The worked example uses 4% only as an illustration, plus 13% HST on the commission. What you agree to, what services it covers and how it is structured should all be discussed and confirmed in writing before you sign.

Will I pay capital gains tax when I sell my home?

Generally, no, if the home has been your principal residence for the whole time you owned it. The principal-residence exemption usually shelters that gain. The answer can change if the property was rented out, used for business, or not your principal residence for some years, so confirm unusual situations with an accountant.

Is a condo always cheaper to run than a house?

No. Downsizing reduces space and maintenance duties, but condo fees commonly run from $450 to $950 or more per month, on top of property tax, utilities not included in the fee, and insurance. Compare full monthly costs before and after the move. A condo can still be the right choice — just verify it.

Looking to Buy or Sell in Toronto & GTA?

Thinking about downsizing? Start with your real kept-cash number, not the price gap. Work With Raj Gill — call (647) 657-4224 or email nestkey11@gmail.com for a worked budget for your home and the kind of place you want next, anywhere in Toronto & the GTA.