Real Estate Commission in Ontario (2026): There Is No Standard Rate, and There Cannot Be
A going rate agreed across the industry would be price-fixing. What you are quoted is a custom, not a tariff.
In short
The seller pays, out of the sale proceeds, under the listing agreement. Commonly 5% of the sale price, usually split 2.5% to the listing brokerage and 2.5% to the buyer’s brokerage, with rates from 3.5% to 5% all common. Add 13% HST on top.
On an $800,000 sale at five per cent that is $40,000 plus $5,200 HST — $45,200. One percentage point either way is $8,000 before tax.
And the thing almost nobody is told: there is no standard rate. An agreed going rate across the industry would be an offence under the federal Competition Act. Five per cent is what is commonly quoted, not what is owed.
What does commission actually come to?
Sale price times rate, plus thirteen per cent. Here it is worked through.
| Sale price | At 4% | At 5% | Difference |
|---|---|---|---|
| $600,000 | $24,000 + HST = $27,120 | $30,000 + HST = $33,900 | $6,780 |
| $800,000 | $32,000 + HST = $36,160 | $40,000 + HST = $45,200 | $9,040 |
| $1,000,000 | $40,000 + HST = $45,200 | $50,000 + HST = $56,500 | $11,300 |
| $1,500,000 | $60,000 + HST = $67,800 | $75,000 + HST = $84,750 | $16,950 |
Those differences are the reason the conversation is worth having, and the reason it is worth having before the listing agreement is signed rather than after the offer arrives.
Who really pays it?
On paper, the seller. In practice the answer is slightly more interesting, and both halves are true.
Mechanically it is unambiguous: the listing agreement commits the seller to a commission, the lawyers deduct it from the proceeds on closing, and the buyer never writes that cheque. A buyer working with their own agent normally pays nothing directly to them.
Economically, the money came from the buyer, because it came out of the price the buyer paid. That is why the phrase “the seller pays the commission” is accurate and not quite the whole picture.
What changed under Ontario’s current rules is the paperwork. Buyer representation is now set out in a written agreement, which means the compensation arrangement is written down somewhere you can read it. So the practical advice is simple: read what your own agreement says about compensation rather than assuming the default holds in your case.
Where the money goes
The agent does not keep the number on the sign.
None of this obliges you to pay any particular rate. It is context for why a rate that looks large is not the same as income, and why a very low rate usually means something has been removed from the service rather than absorbed.
How to negotiate it properly
Not by asking for a discount. By asking what each rate buys.
Full service, discount or flat fee?
Three models exist and the right one depends on your property and your appetite, not on which is cheapest.
| Model | You pay | Works when |
|---|---|---|
| Full service | Commonly 4–5% plus HST | You want marketing, showings and negotiation handled end to end |
| Discount or tiered | Typically 3.5–4% plus HST | You accept a reduced marketing package, or the property largely sells itself |
| Flat fee / mere posting | A set fee, plus whatever is offered to a buyer’s brokerage | You are comfortable running showings and negotiating yourself |
With a flat-fee listing, remember that the amount offered to a cooperating brokerage is still a decision you make, and it is visible to the agents bringing buyers.
Red flags
What to do next
Before you sign any listing agreement, ask three questions and get the answers in writing: what is the total rate, how is it split with a cooperating brokerage, and what exactly is included at that rate. Then ask one more — what comes out if the rate drops half a point.
Compare professional services in Ontario on Ontario24 and contact brokerages directly. Ontario24 is a classified directory — we help you find and compare, and we do not vet, endorse or recommend anyone. Before you sign with anyone, check their registration and discipline history — it is free and public. How to choose an agent covers representation, and the closing costs guide covers what a buyer pays on top of the price.
Before you call anyone, it helps to know what this job should cost and what the next one will. What things cost in Ontario in 2026 puts 75 service prices in one table.
Frequently asked questions
The seller pays it out of the sale proceeds, under the listing agreement. The buyer does not write a commission cheque in a typical transaction — although the money comes out of the price the buyer paid, which is why “the seller pays” is true on paper and arguable in economics.
Commonly quoted at five per cent of the sale price, usually split 2.5 per cent to the listing brokerage and 2.5 per cent to the buyer’s brokerage. Three and a half to five per cent are all common depending on the brokerage and service model, and 13 per cent HST is added on top.
No, and there cannot be. A going rate agreed across the industry would be price-fixing under the federal Competition Act. The percentages you see quoted are what is common, not what is required — the rate, the split and the structure are all negotiable.
At five per cent, $40,000 plus 13 per cent HST, so $45,200 in total, typically divided $20,000 to each brokerage before tax. At four per cent it is $32,000 plus HST. One percentage point at this price is $8,000 before tax, which is why the conversation is worth having.
Yes. What to ask alongside the number is what a lower rate removes — photography, staging, floor plans, advertising spend, the offer to cooperating brokerages. A cheaper rate with a thinner marketing package is a different product rather than simply a discount.
Marketing and listing, photography and presentation, showings and open houses, negotiation, paperwork and coordination through to closing, plus brokerage overhead, insurance and regulatory costs. The agent does not keep the whole figure — it goes to the brokerage first and is split under their own arrangement.
Yes, 13 per cent, added to the commission and paid by the seller. On a $40,000 commission that is $5,200, and it is the line people most often forget when estimating net proceeds.
Sources
Commission ranges, the common split and the application of 13% HST are drawn from published 2026 commission guides and calculators for Ontario, checked 17 September 2026 — largely published by brokerages and industry sites, so treat them as what is commonly quoted rather than a schedule. Commission is negotiable and there is no standard or mandated rate; an agreed industry-wide rate would raise issues under the federal Competition Act. Representation and written agreements between buyers, sellers and brokerages are governed by the Trust in Real Estate Services Act, administered by the Real Estate Council of Ontario. The worked examples above are plain arithmetic, given so you can substitute your own figures. Nothing here is legal or financial advice. Ontario24 is a classified directory and does not list, sell or broker property.