Costs, Comparisons and 2026 Rules
Realtor commission in Canada: how it is calculated, split and taxed
How real estate commission works in Canada in 2026, from percentage and tiered rates to flat fees, the buyer-side split, GST/HST on commission and when it is paid.
Realtor commission in Canada is a fee the seller agrees to pay the listing brokerage, usually a percentage of the final sale price, plus GST or HST. There is no legal or standard rate: the amount, the structure and how much of it goes to the buyer's brokerage are all negotiable and written into the listing agreement. Commission is normally paid out of the deposit and sale proceeds on closing, so the seller never writes a separate cheque, but it is still the largest selling cost for most homeowners.
This guide explains the structures you will see, how the split with the buyer's side works, how sales tax is added and what to check in the agreement. It is part of the overview of buying and selling costs. Figures are illustrative.
The common commission structures
| Structure | How it is written | Example on a $900,000 sale | Notes |
|---|---|---|---|
| Single percentage | X% of the sale price | 4% = $36,000 | Simple; cost rises in line with price |
| Tiered percentage | Higher % on the first part, lower % on the rest | 7% on first $100,000 + 2.5% on balance = $7,000 + $20,000 = $27,000 | Long used in parts of Western Canada; check both tiers |
| Listing side + buyer side | e.g. 2% to listing brokerage + 2% offered to buyer brokerage | 2% + 2% = $36,000 | The two parts may be negotiated separately |
| Flat fee | Fixed dollar amount | $5,000 + offer to buyer's side | Often fewer services; see flat fee or private sale |
| Percentage with minimum | X% but not less than $Y | 2.5% with $10,000 minimum | Minimum bites on lower-priced homes |
Every structure has sales tax added on top unless the agreement expressly says the figure includes it.
How the buyer's brokerage gets paid
In a typical Canadian MLS sale, the listing brokerage offers part of the commission it receives to the brokerage that brings the buyer. This is often called the cooperating commission. The buyer signs a buyer representation agreement with their own brokerage that sets out what that brokerage expects to be paid.
Three situations follow:
- Offer equals the buyer agreement. The buyer's brokerage is paid entirely from the seller's commission. The buyer pays nothing directly.
- Offer is lower than the buyer agreement. Depending on the wording, the buyer may owe the difference, plus tax, on closing. Buyers should read this clause before making offers.
- No offer at all (private sale or some flat-fee listings). The buyer pays the full fee or negotiates for the seller to contribute in the offer.
In Ontario, the Trust in Real Estate Services Act, 2002 (TRESA), in force since 1 December 2023, requires a brokerage to have a written agreement with a buyer client, and RECO publishes an information guide that brokerages must give consumers. In BC, the regulator BCFSA requires disclosure of representation and remuneration before services are provided. The amount offered to the buyer's brokerage has historically been visible to realtors on the MLS system but not always to the public. Commission transparency is at the centre of the Competition Bureau's investigation of CREA rules opened in 2024; ask your agent to show you the offered amount in writing. See what is changing.
GST, HST and QST on commission
Real estate services are taxable supplies. The tax depends on the province where the property is located:
| Province | Tax added to commission | 4% commission becomes |
|---|---|---|
| Ontario | 13% HST | 4.52% |
| Nova Scotia | 14% HST | 4.56% |
| New Brunswick, Newfoundland and Labrador, PEI | 15% HST | 4.6% |
| Quebec | 5% GST + 9.975% QST | about 4.6% |
| Alberta, BC, Saskatchewan, Manitoba, territories | 5% GST | 4.2% |
Nova Scotia's HST rate fell from 15% to 14% on 1 April 2025, so older listing agreement templates may still show 15%.
Worked example. $750,000 sale in Halifax at 3.5% commission: $750,000 x 3.5% = $26,250; HST at 14% = $3,675; total $29,925.
When and how commission is paid
- On acceptance, the buyer's deposit is usually held in the listing brokerage's trust account (in Quebec, often with the notary).
- On closing, the brokerage keeps the deposit toward the commission, and the seller's lawyer or notary pays any balance from the sale proceeds.
- If the deposit is larger than the commission, the brokerage pays the excess to the seller's lawyer.
- The listing brokerage pays the buyer's brokerage its share.
The commission is earned under the terms of the agreement, typically when a sale closes. If the deal collapses because the buyer defaults, the agreement may still entitle the brokerage to part of the deposit. Read that clause.
What to check in the listing agreement
- The rate or dollar amount, and whether it includes GST/HST
- How much is offered to the buyer's brokerage, and whether it can change during the listing
- The expiry date and the holdover clause, which can make commission payable if you sell to someone introduced during the listing, even after it expires (see listing agreement traps)
- What happens if you relist with another brokerage
- Which services are included: photos, staging, open houses, pre-listing inspection
- Whether there is a separate administration or transaction fee
Is commission tax-deductible?
On the sale of your principal residence, the gain is usually exempt, so the commission has no tax effect. On a rental property, cottage or other property that is not fully covered by the principal residence exemption, commission and legal fees are outlays and expenses of disposition and reduce the capital gain. Keep the closing statement. See tax rules when you sell.
Frequently asked questions
What is the usual realtor commission in Canada?
There is no official usual rate, and figures quoted in the media vary by market. Treat any rate as a starting point for negotiation and compare written proposals from at least two brokerages. The negotiation guide explains what to ask for.
Does the buyer pay commission in Canada?
Usually the buyer's brokerage is paid from the seller's commission, but the buyer representation agreement can make the buyer responsible for any shortfall. Ask your agent what happens if a listing offers less than your agreement.
Is HST charged on the whole sale price?
No. On a resale home, HST is charged on the commission, not on the price. New homes are different: see GST/HST on new homes.
Can I pay commission only if the home sells above a target price?
You can propose a bonus structure, for example a lower base rate plus a higher rate on the part above a target price. Write it precisely, including how tax applies.
Sources
- Real Estate Council of Ontario (RECO) — TRESA rules, written agreements and the consumer information guide
- BC Financial Services Authority (BCFSA) — disclosure rules for BC licensees
- OACIQ — brokerage contracts in Quebec
- Canada Revenue Agency — GST/HST rates by province
- The Canadian Real Estate Association — REALTOR Code and MLS rules
