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Realtor Commission in Canada: What You Pay, What's Negotiable, and What Changed

How realtor commissions work in Canada, typical rates by market, HST implications, and how recent industry changes affect what buyers and sellers pay.

Realtor Commission in Canada: What You Pay, What's Negotiable, and What Changed

Realtor commission is almost always the largest single cost of selling a home in Canada, yet most sellers don't fully understand how it works until they see the final statement of adjustments. Here's the complete picture.

How Commission Works

The seller typically pays the entire commission — both their own agent (listing agent) and the buyer's agent. This amount is negotiated with the listing agent before signing a listing agreement and is stated as a percentage of the sale price.

Common structures:

  • Tiered: e.g., 5% on the first $100,000 + 2.5% on the remainder
  • Flat percentage: e.g., 3.5% total, split between agents
  • Flat fee: fixed dollar amount regardless of sale price (typically from discount brokerages)

HST on Commission

Commission is a professional service — HST (or GST, depending on province) applies on top of the commission amount. In Ontario (13% HST), a $25,000 commission becomes $28,250 out of your proceeds.

| Province | Tax Rate on Commission | |---------|----------------------| | Ontario | 13% HST | | BC | 5% GST | | Alberta | 5% GST | | Quebec | 5% GST + 9.975% QST | | Nova Scotia | 15% HST |

What's Changed: Buyer Representation Agreements

As of 2024, CREA's updated rules require buyer's agents to have a signed Buyer Representation Agreement before showing homes. This formalizes the relationship between buyers and their agents and clarifies compensation — buyers may now negotiate directly with their agent on what they pay, separately from the seller's commission offer.

Is Commission Negotiable?

Yes. Commission rates are always negotiable in Canada. The "standard" rate in any market is a starting point, not a fixed rule. Factors that affect negotiating leverage:

  • High sale price (agents earn more per transaction)
  • Fast-moving market (properties sell quickly with less work)
  • Listing multiple properties with the same agent
  • Willingness to do more of the process yourself (showings, staging)

Try the Calculator

→ Realtor Commission Calculator

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