What Are Closing Costs?
Closing costs refer to the various fees, taxes, and charges that are incurred at the final stage of a real estate transaction. In Quebec, these costs may include notary fees, real estate agent commissions, adjustments for property taxes or utility bills, discharge fees for mortgages, and applicable provincial or municipal taxes such as the taxe de bienvenue (welcome tax) if applicable to the buyer.
When selling a home, many of these costs are either paid out-of-pocket or deducted directly from the sale proceeds. Having a clear understanding of these expenses is essential for homeowners in Quebec, as it helps avoid surprises and ensures a smooth transaction process.
How Much Are Closing Costs in Quebec?
In Quebec, closing costs for the seller typically range from 3% to 5% of the selling price, though the exact amount depends on the property’s value, location, and the specifics of the transaction. These costs commonly include real estate agent commissions (often around 4–5% split between buyer and seller agents), notary or lawyer fees for discharging the mortgage, and potential adjustments for property taxes or utilities.
Unlike in some other provinces, the land transfer tax (taxe de bienvenue) is paid by the buyer, not the seller. On closing day, these fees are usually deducted from the sale proceeds by the notary handling the transaction. Sellers should also account for mortgage discharge fees charged by their financial institution, which can include penalties for breaking a term early.
Types of Closing Costs When Selling a House in Quebec
There are several different types of closing costs that sellers may face when completing the sale of their home. These costs can vary depending on the property type and location, as well as specific circumstances like whether you’re selling a condo or a detached home. Here is a list of closing costs to consider:
Real Estate Agent Commission Fees
One of the largest closing costs when selling a home in Quebec is the real estate commission. This fee is usually paid by the seller and is split between the seller’s agent and the buyer’s agent.
The commission is calculated as a percentage of the final sale price, typically ranging from 4% to 5%. In Quebec, the average commission is around 4%, but it is fully negotiable depending on the agent, location, and services offered. Some sellers may choose lower-commission brokerages or sell privately to reduce this cost.
Notary Fees
In Quebec, a notary is typically required to handle the legal side of a property sale. Under Quebec’s civil law system, notaries play a central role in real estate transactions. Their responsibilities include reviewing and preparing legal documents, such as the deed of sale, conducting a title search, handling the transfer of ownership, and ensuring that the entire transaction complies with provincial laws.
They also register the property with the land registry and manage the distribution of funds, such as paying off existing mortgages or disbursing commissions. Notary fees usually range from $1,000 to $2,500, depending on the complexity and value of the property involved.
Land Transfer Tax (Welcome Tax)
The land transfer tax, commonly known as the “welcome tax” (taxe de bienvenue), is almost always the responsibility of the buyer in Quebec. It is not typically paid by the seller, even if the buyer is receiving tax rebates or incentives like the first-time homebuyer rebate. These rebates may reduce the buyer’s costs, but do not shift responsibility to the seller.
The welcome tax is calculated based on the higher of the sale price or the property’s municipal evaluation, and rates vary by municipality. Larger cities like Montreal, Laval, or Longueuil may apply higher tax brackets for more expensive properties.
Mortgage Payoff
If you still have a mortgage on your home, the remaining balance must be paid off at closing. This may also include early repayment penalties, depending on the terms of your mortgage agreement. To avoid surprises, it’s important to consult your lender in advance to confirm the full amount owing, including any fees or penalties, so you know exactly what to expect on closing day.
Mortgage Default Insurance
If you originally purchased the home with mortgage default insurance, you may be required to pay a portion of the premium when selling. This premium protects the lender in case you default on your mortgage and could be included in your closing costs if you’re selling within a few years of purchasing the property.
Property Taxes
In Quebec, property taxes are typically prorated between the buyer and the seller based on the date of closing. If you’ve already paid the property taxes for the full year, you may be entitled to a reimbursement from the buyer for the portion of the year they will own the home. Conversely, if taxes are due after the closing date, the seller may need to cover their share of the upcoming bill. These adjustments are calculated and handled by the notary during the transaction.
If you are selling your principal residence, you may qualify for the principal residence exemption, which allows you to avoid paying capital gains tax on any profit made from the sale. This exemption applies as long as the home was your designated primary residence during the time you owned it.
Registration Fees
In Quebec, registration fees are paid to the Registre foncier du Québec (Land Registry Office) to officially record the property transfer. This process ensures that public records are updated and the sale is legally recognized, protecting both parties in the transaction.
Certificate of Location (If Required)
Sellers in Quebec are legally required to provide a valid Certificate of Location, which outlines the property’s boundaries, zoning compliance, and any legal encroachments. If your certificate is more than 10 years old or if changes have been made to the property (like a new fence or extension), you may need to hire a land surveyor to prepare a new one. The cost for an updated certificate typically ranges from $1,000 to $2,000, depending on property size and complexity.
Inspection Fees and Repair Costs
If the buyer requests a professional home inspection, it is typically the buyer who covers the cost of the inspection itself. However, if the inspection reveals significant issues, such as structural defects, roofing problems, or faulty plumbing, the seller may be asked to cover the cost of repairs, offer a price reduction, or provide a credit at closing.
While sellers are not usually required to pay for the inspection upfront, addressing major problems can become part of the negotiation process. Being prepared to negotiate repairs or pricing adjustments can help keep the deal on track and avoid delays.
Additional Costs to Consider When Selling a House
In addition to standard closing costs, sellers in Quebec should be prepared for a range of administrative and out-of-pocket expenses that can impact their net profit from the sale. These additional closing costs can add up quickly, so it’s important to budget accordingly to avoid surprises and ensure a clear picture of your final earnings.
Here is a breakdown of expenses:
- Property Appraisal Fees: While not always required, hiring a professional appraiser can help you set a fair property price. This typically costs between $300 and $600.
- Marketing Costs: Effective marketing—such as home staging, professional photography, and advertising—can significantly boost buyer interest, but may also lead to notable upfront expenses.
- Moving Costs: Whether you’re hiring movers or renting a truck, moving-related expenses can vary widely, especially for long-distance relocations.
- Home Repairs and Upgrades: Addressing issues found during a buyer’s inspection or making pre-sale improvements can involve unexpected repair costs that help preserve your asking price.
- Legal and Administrative Fees: While the notary handles most legal documentation, sellers may still incur fees for contract preparation, title document updates, or mortgage discharge processing.
How to Calculate Closing Costs
Closing costs can vary depending on the financial transaction, property value, and location, but it’s important to budget accurately to avoid surprises. One of the easiest ways to estimate these expenses is by using a closing costs calculator, which you can find online through many financial or real estate websites. These tools allow you to input key details—such as your property’s sale price—to generate a tailored estimate of your total closing costs.
When using a calculator or budgeting manually, be sure to include all common costs, such as:
- Legal or notary fees
- Real estate agent commissions
- Applicable taxes (e.g., adjustments for property taxes)
- Mortgage discharge fees
- Optional costs, like title insurance or pre-sale repairs
A clear understanding of these figures ensures you’re financially prepared for the final stages of the sale.
How to Avoid Closing Costs When Selling Your Home?
The best way to avoid typical closing costs is to sell to a house-buying company. These companies purchase residential property directly, eliminating real estate closing costs, extra costs, and delays.
You won’t need a property survey or to worry about property defects. Plus, they buy homes at fair market value without requiring costly repairs. At Vendu24h, we make selling easy by offering competitive cash offers and handling all fees.
Top Benefits of Selling to a House Buying Company
- No Closing Costs: Save thousands by avoiding traditional real estate closing costs. When you sell to a house buying company, you can skip lawyer fees, agent commissions, and other typical closing expenses that often reduce your final payout.
- Sell As-Is: There’s no need to spend time or money on repairs, renovations, or staging. We purchase homes in any condition, including those with structural issues, outdated interiors, or other costly problems.
- Fast and Hassle-Free Sale: Avoid the long timelines and uncertainty of traditional sales. We provide cash offers within days, eliminating the need for property surveys, financing contingencies, or drawn-out negotiations. Quick closings mean you can move on faster.
- Paid Upfront in Cash: Receive your payment upfront in full, in cash—no waiting for mortgage approvals or buyer financing to go through. This ensures a smooth, secure transaction without delays.
- Guaranteed Sale: Skip the stress of showings, buyer dropouts, or changing market conditions. We offer guaranteed, fair-market-value deals, giving you certainty and peace of mind from day one.
Save on Closing Fees by Selling Your House to Vendu24h
At Vendu24h, we make selling your home simple and stress-free. We buy houses directly, eliminating the hassle of traditional sales. No listings, no showings, and no waiting—we handle everything.
You don’t have to worry about costly repairs, agent commissions, or closing fees. Our process is quick, transparent, and designed to give you a fair cash offer. Whether you’re dealing with financial difficulties, moving, or just want a fast sale, we provide a seamless solution tailored to your needs.