What are net proceeds from a home sale?

Every Calgary seller asks the same question: how much will I actually walk away with? The answer is net proceeds — and understanding the difference between your sale price and your net is essential for planning your next home purchase.

The net proceeds calculation

Net proceeds = Sale price − All deductions at closing. The key deductions for a typical Calgary home sale are:

Outstanding mortgage balance: The single largest deduction. Your lawyer requests a mortgage discharge statement from your lender, which includes the outstanding principal, any accrued interest to the closing date, and any prepayment penalty.
REALTOR® commissions: Typically 3–5% of the sale price, split between the listing and buyer's agent brokerages. Exact rates are negotiated at listing.
Real Property Report and compliance: $1,200–$2,000 depending on lot complexity and whether a new survey is needed.
Legal fees: Seller's legal fees for the closing run $800–$1,500.
Mortgage prepayment penalty: If you are paying out a fixed-rate mortgage before its term ends, the penalty can be substantial — typically the greater of 3 months' interest or the Interest Rate Differential (IRD). Variable-rate mortgage penalties are typically 3 months' interest only.
Adjustments: Property taxes are prorated to the closing date. If the seller has paid taxes beyond closing, they are reimbursed; if taxes are outstanding, they are deducted.
Holdbacks (if applicable): Funds withheld pending completion of a post-closing obligation.

Example net proceeds on a $750,000 sale

Sale price: $750,000. Mortgage balance: $380,000. Commissions (4%): $30,000. RPR: $1,600. Legal fees: $1,200. Property tax adjustment: ($200 credit). Net proceeds: approximately $337,400 — before prepayment penalty. If there is a $12,000 IRD penalty, the net drops to approximately $325,400.

Why net proceeds matter for upsizers

If your net proceeds are your down payment on the next home, knowing the accurate figure before you make an offer is critical. An error of $20,000 in the net proceeds estimate can mean the difference between qualifying for the home you want and being short. Ryan provides every seller with a detailed net-proceeds estimate before the listing is prepared.

Frequently asked questions

How do I calculate my net proceeds from a Calgary home sale?

Start with your expected sale price and subtract: your outstanding mortgage balance, REALTOR® commissions, RPR cost, your lawyer's fees, any prepayment penalty, and property tax adjustments. Ryan provides a detailed net-proceeds worksheet for every KARAKTER listing so sellers have accurate figures before they begin searching for their next home.

What is a mortgage prepayment penalty and how much is it?

A prepayment penalty is charged by your lender when you pay off a fixed-rate mortgage before its maturity date. The penalty is typically the greater of 3 months' interest or the Interest Rate Differential (IRD) — the difference between your mortgage rate and current rates for the remaining term. On a $400,000 mortgage with 2 years remaining, the IRD penalty can easily reach $10,000–$20,000.

Does Alberta charge land transfer tax on home sales?

No. Alberta is one of only two Canadian provinces (with Saskatchewan) that does not charge a provincial land transfer tax on home sales. This saves Alberta buyers $3,000–$10,000+ compared to equivalent purchases in Ontario or BC. There is also no municipal land transfer tax in Calgary.

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Calgary REALTOR® specialising in divorce, estate, and upsizing transactions. Free consultation — no obligation.

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This page is for general information only and does not constitute legal or tax advice. Consult a qualified Alberta lawyer or accountant for advice specific to your situation.