Should I sell my house and rent when I retire in Canada?

If you are asking whether to sell your house and rent in retirement, the honest answer starts with what you want the money and the home to do. Waterloo Downsizing is a resource for people who decide to move, and introductions from this site go to agents on the operating team at eXp Realty, so it is not a search of the whole market and we do not claim to be neutral. Renting is one of the real options, so it belongs on the list.

This guide is general information, not legal, tax or financial advice. Benefit rules, credit amounts and rent rules change. Confirm each item with the agency named, an accountant, a lawyer or a financial adviser.

What selling frees up and what it triggers

When you sell, you receive the sale price less what you owe and what the sale costs. The CRA's moving expense page lists the costs of selling as including legal or notary fees, real estate commission and mortgage penalties, and the CRA says a registered agent charges GST/HST on commission. The net proceeds calculator and the guide on estimating net proceeds walk through the arithmetic.

The proceeds do not arrive as spending money you can ignore. Where you hold them matters for your income, your tax return and your safety net, and that is a question for a financial adviser who does not earn a fee from the product. A house is also an asset you can borrow against later, so selling it removes that option. Read reverse mortgage or downsize if you are weighing borrowing instead.

If you rent rather than buy again, you do not pay Ontario land transfer tax, because that is paid by the buyer of the next property, not the seller. You would also avoid the purchase costs of a new home. That is one clear difference from the usual downsize. See Costs and Taxes for the full list.

The principal residence exemption and reporting the sale

The CRA's principal residence page says you must report the sale and designate the property on your return to claim the exemption, using Schedule 3 and Form T2091(IND), even when the gain is fully exempt. It also says only one property per family unit can be designated for each year from 1993 onward, and that land is usually limited to half a hectare unless more is necessary.

If you also own a cottage, that rule matters, because the same family cannot use the exemption on both for the same year. Ask an accountant before you sell either one.

Selling a house and income-tested benefits: OAS and GIS

Old Age Security (OAS) has a recovery tax. The Government of Canada says that if your annual net world income is above a threshold, you repay 15% of the amount over it, and the repayment is deducted from your monthly OAS payments. The threshold is set for each period, so read the current page for the number.

The Guaranteed Income Supplement (GIS) is for OAS pensioners with low income, and the Government of Canada's GIS page sets income thresholds by marital status. The principal residence gain, if exempt, is not taxed. Interest or dividends from investing the proceeds are income in the usual way. How a particular type of income counts toward GIS is a question for Service Canada, and it is worth asking before you sell, not after.

Plan for a spread of outcomes rather than one. Your income in a given year may include pension income, withdrawals and investment income, and the OAS recovery tax and the GIS thresholds look at income, so the timing of withdrawals can matter. An accountant can model a few years side by side. Bring your last tax return, your pension statements and a list of what you expect to spend on housing, so the conversation starts from your real figures.

What you give up and what you gain as a renter

What you give up

• Control of the place. You hold a tenancy, not the property. Ask a lawyer or the Landlord and Tenant Board when and how a tenancy can end, and what your lease says.
• Rent that rises. A rent increase can come every 12 months with written notice, discussed below.
• Your own equity. You no longer hold an asset that you can later borrow against or sell. See reverse mortgage or downsize for that comparison.
• Renovations. Ramps, grab bars and bathroom changes need the landlord's agreement.

What you gain as a renter

You no longer pay a property tax bill, and repairs are the landlord's job, as set out in your lease and the law. There is no condo fee or special assessment on you, and you do not manage a roof, furnace or driveway. You may also have more flexibility to move if your needs change.

Check the lease for who pays for heat, hydro, parking and storage and whether pets are allowed. Those are the items that change the real cost of renting.

Owner and renter property tax help in Ontario

The Senior Homeowners' Property Tax Grant is for people who own and occupy their principal residence, and renters are not eligible. If you sell, you lose access to it. See property tax relief for seniors for what owners can claim.

The Ontario Energy and Property Tax Credit, part of the Ontario Trillium Benefit, is different. Ontario says renters can qualify if their landlord was required to pay property tax on their main residence. For the 2026 benefit year, the maximum for people aged 65 and over is up to $1,488. You apply through your tax return, and the amount can change each year.

Renting in Ontario: rent increases and tenant protections

Ontario's rent increase page says a landlord can raise rent once every 12 months, with written notice on the proper form at least 90 days ahead. A yearly guideline sets the maximum for most units without approval from the Landlord and Tenant Board. The page also says landlords can apply to the Board to raise rent by more than the guideline in some cases.

Not every unit is covered. Ontario says the guideline does not apply to new buildings or additions first occupied for residential purposes after November 15, 2018. A newer building may have no cap on increases, so ask when the building was first occupied before you sign. Check ontario.ca for the current year's guideline, and contact the Landlord and Tenant Board or a lawyer about your own lease.

If you are thinking of renting for a few years and buying again later, remember that a later purchase brings land transfer tax on that home at the rates in effect then. See the province's land transfer tax page and buy first or sell first for how sequencing affects the move.

Renting a retirement home suite is a different thing

A suite in a retirement home is not the same as an apartment. The Ontario seniors guide says retirement homes are covered by rental agreements that differ from standard tenancies. A home has to give you a care home information package that discloses all fees and services before you sign. It says residents pay accommodation costs and pay for care services bought through the home.

The Retirement Homes Regulatory Authority (RHRA) licenses and inspects homes and keeps a public database, at rhra.ca, that shows licence status and compliance history. You can reach RHRA at 1-855-275-7472. For help with home care, see the aging in place guide.

Keeping the house and renting it out

Some owners keep the house and rent it out instead of selling. The CRA says a change in use is treated as a sale at fair market value, and that elections may defer that treatment. Whether an election suits you is a question for an accountant, and it should be asked before the first tenant moves in.

The City of Waterloo says landlords of houses, duplexes and townhouses need a rental licence, which is renewed annually, and applications go through its permits portal. Check the City's page before you advertise. Kitchener and Cambridge have their own rules, which you should confirm with each city. Being a landlord also means repairs, tenant law and paperwork, which are some of the things many people are trying to leave behind.

Helping a parent through this choice raises further questions about authority and timing. See helping a parent downsize, and if transit will matter once you are renting, getting around Waterloo Region after 65.

What changes: a table

Questions to answer before you decide

• List your real yearly costs of owning, including property tax, insurance, hydro, repairs and yard work.
• Ask the landlord for the lease, and ask when the building was first occupied.
• Ask an accountant how the sale is reported, how your designation works and how income from the proceeds is taxed.
• Ask Service Canada how your benefits would be assessed if your income changes.
• Check the Ontario Energy and Property Tax Credit and your eligibility for any grant you would lose.
• Talk to a lawyer about the lease, and about a power of attorney in case your circumstances change.
• Compare renting with buying smaller. See condo, townhouse, bungalow or life lease and adult lifestyle communities.
• Think about where you want to live. The neighbourhood guides and resources can help.

If you decide to sell and would like an introduction, you can ask to be matched.