What is a statement of adjustments?
A statement of adjustments is a worksheet that settles the running costs of a property between a buyer and a seller. Most of these costs get billed by the month or the year, so on closing day one side has usually paid ahead or fallen behind. The statement adjusts for that, line by line, so neither party pays for time it does not own the home.
On a resale deal the seller’s lawyer usually drafts the statement and sends it to the buyer’s lawyer to check. The two reconcile any differences, and you end up with one agreed document. If you are buying, this is also where your Ontario purchase comes together as a final number. If you are selling a property in Ontario, it confirms what you walk away with.
The statement always reaches one bottom line, the balance due on closing. For a buyer, that is the cash you bring to complete the purchase after your deposit and mortgage are counted. For a seller, it is the money left for you once the costs you owe come off the price.
When do you get your statement of adjustments, and who prepares it?
Expect the statement a few days before closing, not weeks ahead. Your lawyer cannot finalize it until the numbers are known, and some of those numbers arrive late. The realty tax certificate from the municipality, the condo status certificate, and the final mortgage payout statement all feed the calculation, and each one comes from a different source on its own timeline.
Here is how the work runs at our firm. Once we have your agreement of purchase and sale, we order a tax certificate from the municipality to confirm exactly what has been paid and what is owing on the property tax account. For a condo we review the status certificate to confirm the monthly fees and any special assessment. We pull the adjustments together, compare them against the other lawyer’s version, and send you the statement with a plain explanation of each line before you sign. If a figure looks wrong, we raise it with the other side and fix it before closing, not after.
Read your statement the day it arrives. If you wait until the signing table, there is no time left to question a number, and a closing can stall over a few hundred dollars that should have been caught earlier.
What goes on a statement of adjustments?
Every deal is different, but most residential statements draw from the same short list of items. Some credit the buyer and some credit the seller, and the direction is what people get wrong. The table below shows the items that turn up most often and which side they usually favour.
| Item | Usually credits | Why |
|---|---|---|
| Purchase price | Seller | The agreed price is the starting debit charged against the buyer. |
| Deposit already paid | Buyer | Your deposit was paid earlier and held in trust, so it comes off what you still owe. |
| Prepaid property taxes | Seller | If the seller paid taxes past closing, you reimburse the seller for your share. |
| Unpaid or arrears taxes | Buyer | If taxes for the seller’s period are still owing, the seller credits you to cover them. |
| Prepaid condo fees | Seller | Condo fees are billed in advance, so the seller is credited for the part after closing. |
| Utilities (water, gas, hydro) | Either | Adjusted to the meter reading or final bill, based on what was prepaid or left owing. |
| Fuel oil or propane in the tank | Seller | A full tank the seller leaves behind is measured and credited to the seller. |
| Rent on a tenanted unit | Buyer | Rent the seller collected for days after closing belongs to you. |
| Last month rent deposit and interest | Buyer | The tenant deposit, plus the interest owed on it, transfers to you. |
| Balance due on closing | Buyer pays | The final figure after every credit and debit is applied. |
This list is typical, not complete. Your own statement may include credits negotiated in your agreement, such as a repair allowance after a home inspection.
How are the adjustments calculated?
Adjustments are figured to the closing date. The seller carries the property’s running costs up to closing, and you take them over from closing day forward. Each shared cost is split by the number of days each side owns the home, which is why these are called prorated amounts.
Property taxes move the most money, so they make the clearest example. Say you buy a home with a July 1 closing and the seller has already paid the full year of property taxes, $6,000 for the calendar year. The seller owned the home for roughly the first half of the year and you own it for the rest, so you reimburse the seller for about $3,000 on the statement. The exact figure is worked out by day count, not rounded halves, but the logic holds. You pay only for the days the home is yours.
The same proration runs through condo fees, utilities, and any other shared cost. Add the credits owed to the seller, subtract your deposit, and the statement arrives at the balance you send to your lawyer before closing.
This example is illustrative. Your actual figures depend on your tax account, your closing date, and the terms of your agreement.
What a Statement of Adjustments Looks Like on a $758,585 Toronto Condo
Here is a complete worked example for a resale condo in the City of Toronto with a sale price of $758,585.00. Every figure below ties out, and the proration math is shown in full so you can follow exactly how each adjustment is reached. The numbers depend on a handful of assumptions, so we have set those out first.
The assumptions behind these numbers
- Resale condo in the City of Toronto, sale price $758,585.00
- Closing date July 17, 2026
- Deposit of $38,000.00, about 5 percent, paid on acceptance and held in the listing brokerage trust account
- Annual 2026 realty taxes of $3,480.00 from the current tax bill, paid in full for the year by the seller
- Monthly common expenses of $625.00, paid by the seller on the first of each month
- The seller carries costs up to and including July 16, and the buyer carries them from July 17 forward. Your agreement of purchase and sale can set a different convention, so confirm it.
What the statement shows
| Item | Credit to Vendor (Seller) | Credit to Purchaser (Buyer) |
|---|---|---|
| Sale price | $758,585.00 | |
| Deposit paid on acceptance | $38,000.00 | |
| Realty tax adjustment, July 17 to December 31, prepaid by seller | $1,601.75 | |
| Common expense adjustment, July 17 to 31, prepaid by seller | $302.42 | |
| Balance due on closing | $722,489.17 | |
| Totals | $760,489.17 | $760,489.17 |
Both columns total $760,489.17, which is how a statement of adjustments balances. The balance due on closing of $722,489.17 is the amount the buyer funds through the mortgage advance and their own money, and it is what the buyer lawyer sends to the seller lawyer to complete the deal.
How we calculated the two adjustments
The seller prepaid the full 2026 tax year of $3,480.00 but owns the unit only until July 16. The buyer owns it from July 17 through December 31, which is 168 days out of the 365 days in 2026, so the buyer reimburses the seller for those 168 days. Divide $3,480.00 by 365 to get a daily rate of $9.5342, then multiply by 168 days. That comes to $1,601.75, credited to the seller.
The seller paid the full July condo fee of $625.00 on July 1 but owns the unit for only the first 16 days of the month. The buyer owns it from July 17 through 31, which is 15 days out of 31. Divide $625.00 by 31 to get a daily rate of $20.1613, then multiply by 15 days. That comes to $302.42, credited to the seller.
Both running accounts were prepaid here, so both adjustments credit the seller. If the seller had instead fallen behind on taxes, that shortfall would credit the buyer, because the buyer inherits the tax account on closing. Which way each line runs depends entirely on what the seller had actually paid by closing day, which your lawyer confirms against the city tax certificate and the condo status certificate.
What the statement leaves out and what a Toronto buyer still pays
This is the point most buyers get wrong. The statement of adjustments settles money between buyer and seller only. Your land transfer tax, legal fees, and title insurance are not adjustments and never appear on it. They sit on your own trust ledger, the separate statement of funds your lawyer prepares that lists everything you bring to closing.
| Buyer closing cost, not on the statement of adjustments | Amount |
|---|---|
| Ontario land transfer tax | $11,646.70 |
| Toronto municipal land transfer tax | $11,646.70 |
| Toronto administration fee on the municipal tax | about $86.78 plus HST |
| Legal fees | typically $1,500 to $2,500 plus HST at our firm |
| Title insurance, registration, and disbursements | a few hundred dollars, depending on the policy |
The two land transfer taxes alone come to $23,293.40, because a Toronto buyer pays both the provincial tax and a municipal tax that mirrors it on any property under three million dollars. Here is how that figure is built for a price of $758,585.00. Ontario charges 0.5 percent on the first $55,000, then 1.0 percent up to $250,000, then 1.5 percent up to $400,000, then 2.0 percent on the rest. That works out to $275.00 plus $1,950.00 plus $2,250.00 plus $7,171.70, which is $11,646.70. The City of Toronto applies the same brackets below three million dollars, so the municipal tax matches at $11,646.70. A first time buyer would reduce each tax by up to $4,000.00 provincially and up to $4,475.00 municipally, but this example assumes a buyer who does not qualify.
How a new build or pre construction statement would differ
A builder statement of adjustments looks heavier. It commonly adds HST on the purchase with the new housing rebate either applied or clawed back, the Tarion enrolment fee passed through to you, development and education levies set by the municipality, hydro and water meter hookup charges, and an interim occupancy fee for the period between when you move in and when the building registers. Pre construction also produces two closings and two statements, the interim occupancy first and the final transfer later. That is a separate worked example if you want one for the article.
A note on these figures
The land transfer taxes are verified against the current Ontario brackets and the Toronto municipal rates, which mirror the province below three million dollars and are current as of June 2026. The tax, deposit, and common expense inputs are realistic assumptions chosen to show the mechanics, not figures from a real file, so a true anonymized example can be swapped in. Toronto condo tax is calculated on the MPAC assessed value, which is frozen at its 2016 level and sits well below a 2026 sale price. That is why a unit selling for $758,585.00 can carry annual taxes near $3,480.00 rather than a figure scaled to the price.
A statement of adjustments is the closing document your lawyer prepares to divide shared property costs fairly between you and the other side as of the closing date. It lists every credit and debit on the deal, then lands on one number, the balance you pay if you are buying or the money you receive if you are selling.
The point of the document is fairness. Property taxes, condo fees, and utilities do not stop neatly on closing day, and one side usually pays ahead or falls behind. The statement squares that up so each party pays only for the days it owns the home. Your lawyer prepares and checks it, and small errors on it cost real money, which is why you read it before you sign, not at the signing table.
Statement of adjustments versus trust ledger
People often blur these two documents, and the difference matters when you budget. The statement of adjustments settles money between you and the other side. The trust ledger is your lawyer’s separate accounting of every dollar that flows through the firm’s trust account to close your file.
Your land transfer tax, legal fees, title insurance premium, and registration costs are real closing costs, but they are not adjustments between buyer and seller. They sit on the trust ledger, not the statement of adjustments. That distinction is why your total cash to close is larger than the balance shown on the statement alone. In Ontario, land transfer tax is payable to the province when the transfer registers, and the City of Toronto charges its own municipal land transfer tax on top for homes inside city limits. Budget for both as buyer costs, separate from the adjustments.
When you ask your lawyer how much to bring to closing, ask for the cash to close figure, which combines the statement balance and the trust ledger costs. The statement balance on its own is not the full picture.
Why new build and condo statements look different
If you are buying from a builder, your statement of adjustments can look nothing like a resale statement, and the surprises are usually expensive. On a resale home the adjustments are modest, a few hundred dollars of taxes and utilities. On a new build, the builder is allowed to pass through a list of charges that can add thousands to your closing.
Watch for these items on a builder’s statement.
- Development levies. Municipalities charge builders to fund roads, water, and services for new communities under the Development Charges Act, 1997, and builders pass these to you at closing. Left uncapped, they can run from a few thousand dollars to tens of thousands. If your agreement did not cap them, you pay whatever lands on the statement.
- HST and the new housing rebate. New homes carry 13 percent HST. Builders usually quote a price with the rebate already credited, on the assumption that you or a close family member will move in. If you are buying to rent the unit out, you do not qualify for that rebate at closing and the builder claws it back, which can mean repaying the provincial portion of up to $24,000 plus the federal portion. You may recover it later through the new residential rental property rebate, but you have to fund it first.
- Tarion enrolment and utility connections. The new home warranty enrolment fee, hydro and water meter hookups, and similar connection costs are commonly charged to you on closing.
- Occupancy fees on a new condo. With a new condo you often move in months before the building registers. During that interim occupancy period you pay the builder a monthly occupancy fee, sometimes called phantom rent, made up of interest on the unpaid balance, estimated common expenses, and estimated taxes. The Condominium Act, 1998 governs this stage. You take title only later, with a second statement of adjustments at final closing.
On a builder deal, ask for an estimate of all closing adjustments in writing before you sign, and have a lawyer review the adjustment clauses in your agreement. Capping development levies in the agreement is far cheaper than discovering an open ended charge a week before closing.
The mistakes we see most often
In our practice, the same handful of errors come up again and again on statements of adjustments. Each one carries a real cost.
- Assuming the property taxes are paid. A statement is only as good as the tax information behind it. If the seller’s side marks the taxes as paid when an installment is still owing, the adjustment runs the wrong way and someone is short at closing. We order the municipal tax certificate so the numbers match the account, not the assumption.
- Letting development levies stay uncapped. Buyers of new builds who do not negotiate a cap on levies can face a closing charge many times what they expected. Fixing this costs nothing if you catch it in the agreement and potentially tens of thousands if you do not.
- Mishandling the HST rebate on a new home. Buyers who plan to rent out a new unit are often surprised to repay the rebate at closing. Knowing your eligibility before you sign lets you budget for it or structure the purchase correctly.
- Forgetting the tenant deposit on an investment property. When you buy a tenanted property, the last month rent deposit and the interest owed on it should transfer to you on the statement. Miss it, and you inherit a deposit obligation to the tenant without the funds to back it.
- Reading the statement for the first time at the signing table. By then there is no time to question a figure. We send the statement ahead and walk you through it so any correction happens before closing day.
How our firm prepares and reviews your statement of adjustments
Reviewing and preparing your statement of adjustments is part of a real estate closing at our firm, not a separate charge. We order the tax certificate, review the condo status certificate where one applies, reconcile the adjustments with the other lawyer, and explain every line to you before you sign. If a number is wrong, we correct it before closing.
Legal fees for a residential purchase or sale in Ontario commonly run between $1,500 and $2,500 plus disbursements, which include title insurance, software and registration charges, and the cost of the searches your file needs. We quote fixed fees so you know the cost before we start, and your first 15 minute consultation is free. We act for buyers and sellers from our Toronto and Ottawa offices, in person or online, and we serve clients in English, French, and Turkish.
Frequently asked questions
Who prepares the statement of adjustments, the buyer’s lawyer or the seller’s?
On a resale deal the seller’s lawyer usually prepares the first draft and sends it to the buyer’s lawyer to review. Both sides check the figures and agree on a final version before closing. For a new build, the builder’s lawyer prepares it, and your lawyer reviews the charges on your behalf.
When will I receive my statement of adjustments?
Usually a few days before closing. Your lawyer needs the tax certificate, condo status certificate, and mortgage payout figures to finalize it, and some of those arrive close to the closing date. Ask your lawyer to send it as soon as it is ready so you have time to read it.
Is land transfer tax part of the statement of adjustments?
No. Land transfer tax is a buyer closing cost that your lawyer collects and pays when the transfer registers. It appears on your trust ledger, not as an adjustment between you and the seller. The same is true of your legal fees and title insurance premium.
What is the balance due on closing?
It is the final figure on the statement after the purchase price, your deposit, and every prorated credit and debit are applied. For a buyer it is the cash you send to your lawyer to complete the purchase, on top of your mortgage advance. For a seller it is what you receive once your costs come off the price.
Can the statement of adjustments change before closing?
Yes. Figures get corrected as final numbers come in, and a wrong entry can be fixed once your lawyer raises it with the other side. That is exactly why you want to read the statement early rather than at the signing table.
Why are the adjustments on my new condo so much higher than I expected?
Builders pass through charges that do not appear on resale deals, including development levies, utility connection fees, Tarion enrolment, and an HST rebate adjustment if you do not qualify to occupy the unit. Have a lawyer review these clauses in your agreement before you sign, because some can be capped or clarified up front.
The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.
