Count the round trip, not just the price gap
Selling at one price and buying at a lower one does not net you the difference. Subtract commission, legal fees on both ends, the mortgage penalty if you are breaking a term, moving costs, and both land transfer taxes on the purchase. In Toronto, that round trip regularly consumes a meaningful share of the gap.
The condo fee is a permanent line item
A monthly fee replaces the roof and furnace you used to pay for unpredictably. That can be a good trade for peace of mind, but it is a fixed cost that rises over time and that lenders count against you if you ever need to borrow again.
Order of operations
Buying first means bridge financing and certainty about where you are going. Selling first means the cash is real but you may be renting in between. Neither is wrong. What matters is deciding deliberately and arranging the financing for that choice before either deal is firm.
- Buy first: bridge loan, no scramble to find a home
- Sell first: known proceeds, possible interim rental
- Same-day closings: possible, tight, worth a rehearsal with your lawyer
If you would rather stay
Some owners downsize only because the monthly cost of staying is too high. Refinancing to a longer amortization, consolidating higher-interest debt into the mortgage, or a reverse mortgage for owners fifty-five and over can all reduce monthly pressure without selling. Worth pricing out before you list.
Frequently asked questions
- Do I pay land transfer tax again when I downsize?
- Yes. Ontario and Toronto land transfer tax are both charged on the home you buy, regardless of how many times you have owned before.
- Should I buy the new place before selling?
- It depends on your tolerance for carrying two properties briefly. Bridge financing makes it workable when the closings are close.
- Is there a way to free up cash without moving?
- Refinancing, a home equity line, or a reverse mortgage for owners fifty-five and over can access equity while you stay in the home.