How do I calculate my net proceeds after sale?
Want to know exactly how much cash you’ll walk away with after selling your home? Here’s a clear, no-fluff way to calculate your net proceeds.
Why net proceeds matter
Net proceeds after sale is the real number that matters. It’s your sale price minus every cost, tax and balance. Buyers don’t care. Agents don’t care. You should care. Knowing your seller net proceeds lets you plan your next move, budget taxes, and avoid surprises at closing.
Simple formula you can use now
Net proceeds = Sale Price – (Mortgage Payoff + Realtor Fees + Closing Costs + Taxes + Any Repairs or Credits)
Step-by-step calculation (use this exact order)
- Start with the agreed sale price.
- Subtract mortgage payoff: call your lender for the exact payout figure on closing day.
- Subtract realtor commissions: commonly 4–6% of sale price. Example: 5% of $600,000 = $30,000.
- Subtract closing costs and legal fees: title, lawyer/notary, discharge fees. Estimate 0.5–1.5% or get quotes.
- Subtract taxes and transfer fees: land transfer tax, HST where applicable, and estimated capital gains tax if property is not your principal residence.
- Subtract seller-paid credits, repairs, or staging refunds agreed at inspection.
- Add/subtract prorations: property taxes, utilities or condo fees already paid by buyer or seller.
Quick worked example
Sale price: $800,000
Mortgage payoff: $300,000
Realtor fees (5%): $40,000
Legal & closing: $3,000
Repairs/credits: $2,000
Estimated net proceeds = $800,000 – ($300,000 + $40,000 + $3,000 + $2,000) = $455,000
Note: If capital gains tax applies, calculate after determining adjusted cost base and exemptions.
Taxes and financial considerations to watch
- Principal residence exemption (Canada/US differences): if the home qualifies, you may avoid capital gains tax. If not, estimate taxable gain on sale and apply your marginal rate.
- Land transfer tax & municipal taxes: vary by province/municipality. Include these in closing costs.
- Mortgage penalties: if you break a fixed mortgage early, get a payout quote — penalties can be thousands.
- RRSP/TFSA or retirement moves: consider tax-efficient reinvestment strategies. Work with an accountant for big gains.
Tools and accuracy tips
- Use a seller net proceeds calculator for a quick estimate. Always confirm mortgage payoff and legal fees with providers.
- Keep a buffer of 1–2% for unexpected closing adjustments.
- Get a written net sheet from your realtor before you sign listing agreements.
Final point: plan, don’t guess
Guessing costs money. Calculate precisely, and you control the outcome. If you want an exact, line-by-line net proceeds calculation for your property — including taxes, mortgage payout and local fees — contact me. I’ll give you a clear net sheet you can trust.
Tony Sousa — Local Realtor
Email: tony@sousasells.ca | Phone: 416-477-2620 | https://www.sousasells.ca
