In 2026, a growing number of empty nesters in Canada’s biggest cities are selling the family home and moving into something smaller. The numbers explain why. Toronto lost more than 77,000 residents to internal migration between 2024 and 2025, and the country recorded its first year-over-year population decline since the Second World War. For homeowners whose children have moved out, the incentives are lining up. Detached home prices in cities like Toronto and Vancouver have held relatively steady, while condo prices have softened. That gap gives sellers leverage they haven’t had in years.
Disclosure: Some links on this page are affiliate links. If you make a purchase through them, Britwealth may earn a commission at no extra cost to you. We only include products and services that are relevant to the topic.
This article is general information only and does not constitute professional advice. For your specific situation, consult a qualified professional.
The market is normalising. The Bank of Canada has held rates in the 2.25–2.75% range, which means buyers have time to negotiate without the urgency of rising rates. For empty nesters, this window offers a rare combination: strong demand for detached homes, enough inventory in the condo market to find a good deal, and a tax exemption that makes the sale of a primary residence one of the most financially advantageous moves available. Here’s what you actually need to know.
Four Things to Know Before Selling Your Family Home
One term comes up repeatedly in this conversation, and it’s worth understanding before you list your home.
What I tend to notice is that people know about the exemption but don’t realise how easily they can lose it. A basement rental that pushes past 50% of the floor area, or a claim for capital cost allowance on a home office, and the tax bill can run into six figures. That alone is worth a conversation with a tax professional before you list.
The Real Cost of Staying Put vs. Selling and Downsizing
Most empty nesters focus on the sale price of their current home. The bigger number is what they avoid paying by selling now. The decision to sell and live mortgage-free turns on a few hard figures that don’t show up on the listing.
Consider the carrying costs of a four-bedroom detached house after the kids have left. Property taxes, utilities, insurance, and maintenance on a larger home easily run 30–50% more than what a well-located two-bedroom condo would cost. Add in the opportunity cost of the equity sitting idle — money that could be earning returns or funding retirement — and the gap widens.
The table below shows what a typical empty nester might expect when comparing regional options. The key is that Ontario and British Columbia, where most empty nesters with significant equity live, are seeing price declines. Selling into a softening market and buying into one that’s already softened further can work in your favour.
→ Scroll right to see all columns
| Region | Average Home Price (June 2026) | Annual Price Change | Market Condition |
|---|---|---|---|
| Ontario | $831,595 | -2.4% | Balanced |
| British Columbia | $946,878 | -0.8% | Buyer’s market |
| Alberta | $541,778 | +3.2% | Seller’s market |
| Quebec | $568,942 | +4.2% | Seller’s market |
The numbers show a clear pattern. Selling in Ontario or British Columbia means exiting a market where prices are slipping. Moving to Alberta or Quebec means buying into one where prices are still climbing, but from a much lower base. A family home in Oakville that sells for $1.2 million can buy a high-end bungalow in Calgary for roughly half that, with cash left over.
What I’d weigh most carefully here is the timing. Ontario is the only region expected to see further price declines in 2026, according to CMHC’s Housing Market Outlook. Selling sooner rather than later could mean netting a significantly higher price than waiting another year.
Three Mistakes Empty Nesters Make When They Sell
Overlooking the 50% rental rule
The Principal Residence Exemption is generous, but it has a hard limit. If you’ve rented out more than 50% of your home’s floor area — even for a few years — the exemption shrinks or disappears. The same applies if you’ve claimed capital cost allowance (depreciation) on the property. The Canada Revenue Agency looks at this closely. An empty nester who rented out two bedrooms in a four-bedroom house and claimed CCA could face a tax bill on hundreds of thousands of dollars of gain they assumed was tax-free. The fix: have a tax accountant review your property use history before you list. If you’re unsure about the rules, speaking with a real estate lawyer through a service like JustAnswer Canada Lawyers can clarify what you’re exposed to before the sale closes.
Buying the wrong kind of condo
Not all condos are built for empty nesters. Many new buildings feature pools, party rooms, and gyms — amenities that drive up monthly fees whether you use them or not. What matters more for someone retiring is a building with solid reserves, good management, and a status certificate that shows no looming special assessments. In 2026, with many buildings aging and construction quality varying, a special assessment for a new roof or elevator can run $20,000–$50,000 per unit. A lawyer who reviews the status certificate before you sign can flag whether the reserve fund is adequate. If the building hasn’t done a study in the last three years, that’s a red flag.
Ignoring the storage question
Canadian winters mean gear. Snowblowers, winter tires, seasonal coats, holiday decorations — all of it needs to go somewhere when you move from a house with a garage and basement to a two-bedroom condo. Many new condo units come with a locker, but not all. Renting external storage in a city like Toronto or Vancouver can cost $150–$300 per month. That’s $1,800–$3,600 a year for space you’re paying to access. The mistake is not checking whether the unit includes a locker, or assuming you can fit everything into a smaller space without planning. What I tend to see is people underestimate the cost of storing what they won’t let go of.
How to Pull Off the Move From a Family Home to a Smaller Property
Decide where you’re going before you list
The biggest risk empty nesters face is selling the family home and then struggling to find the right place to buy. With regional markets moving at different speeds, the smart play is to identify your target area first. If you’re selling in the GTA, look at 15-minute neighbourhoods like Port Credit or Westboro where walkability is high. If you’re considering a move to Alberta, Calgary and Edmonton still offer strong value — the average home price in Alberta is $541,778, roughly half what you’d pay in Vancouver. For those looking at the growing trend of multi-generational living arrangements, the Multigenerational Home Renovation Tax Credit (MHRTC) offers a refundable credit of 15% on up to $50,000 of eligible renovation costs — a maximum of $7,500 back — for creating a self-contained suite with a private entrance, kitchen, and sleeping area.
Get the status certificate reviewed early
When you find a condo you like, condition the offer on a lawyer’s review of the status certificate. This document tells you the health of the building’s reserve fund, any pending special assessments, and the financial track record of the strata corporation. In 2026, with many buildings facing deferred maintenance and rising insurance costs, a clean status certificate is worth paying for. If the reserve fund is below 70% of what the most recent study recommended, plan for a special assessment within the next 2–4 years.
Plan the logistics of the move
Moving from a house to a condo means downsizing before the truck arrives. Start three months out. Sort items into four categories: keep, sell, donate, discard. For documents you need to keep — wills, tax records, property deeds, insurance policies — a secure fireproof safe like the FOWORE 6.5 Cu Ft model gives you a single place to store everything safely during the transition. For items you’re not ready to part with, confirm whether the new unit has a locker or whether you’ll need to rent off-site storage. That monthly cost should be factored into your budget before you commit.
Look for presale assignments in Vancouver
In Greater Vancouver, a quieter opportunity exists. Investors who bought presale condos are now trying to offload their contracts — often below the original purchase price. These presale assignments let a buyer step into the contract at a discount, sometimes 10–20% below what the unit would sell for on the open market. The catch is that you need to move quickly and have your financing pre-approved, since the assignment window is usually short. Working with a real estate agent who specialises in assignments is the way in.
Questions Empty Nesters Ask About Selling and Downsizing
Do I have to pay capital gains tax on the sale of my family home? ▾
What happens if I rent out part of my home before selling? ▾
Is 2026 a good time to sell in Ontario? ▾
What should I look for in a status certificate? ▾
Can I gift money from the sale to my adult children tax-free? ▾
What’s a presale assignment and how do I find one? ▾
What This Shift Means for the Next Decade of Canadian Housing
The wave of empty nesters selling up isn’t a short-term blip. Canada’s population is redistributing — Toronto, Montreal, and Vancouver are seeing declines, while mid-sized cities like Calgary, Edmonton, Moncton, and Brantford are growing fast. For empty nesters, this creates a rare window: sell into a market where detached homes still command strong prices, then buy into a market where prices are lower and lifestyle is better. The broader trend toward smaller, more efficient homes aligns with what empty nesters actually need — less space, less maintenance, and more freedom.
Remember: this article is general information only. For advice on your specific situation, speak to a qualified professional.
If this was useful, you might also want to read Is Real Estate Still the Best Investment for Canadians in Today’s Economy?.
Sources and Further Reading
How Government Housing Policies Are Failing to Solve Canada’s Affordability Crisis — Explores the policy side of the affordability challenges driving empty nesters to sell up and move.
The Debate Over Rent Control in Canada — Useful context if you’re considering renting out part of your home before selling.
Greater Toronto Home Pros (2026). 🔗
CMHC (2026). Housing Market Outlook. 🔗
Wowa (2026). Canada Housing Market Report. 🔗
BNN Bloomberg (2026). Housing Demand Weakens as Population Growth Stalls. 🔗
