A detailed financial document prepared by the buyer's and seller's lawyers that itemizes all costs, credits, and adjustments between the parties at closing. It accounts for prepaid property taxes, utility bills, condo fees, rent (if applicable), and any other amounts that need to be prorated between buyer and seller based on the closing date.
Why It Matters
The statement of adjustments determines the exact amount you need to bring to closing -- it's often different from what you initially expected. If the seller prepaid property taxes for the full year and you're closing in June, you'll reimburse them for the remaining months. Your lawyer will walk you through every line.
Real-World Example
You are closing on a $750,000 home in Markham on July 1. The seller prepaid property taxes of $4,800 for the full year. You owe the seller a credit of $2,400 for the July-December portion. The seller also prepaid the water bill for the quarter -- you owe a credit for the remaining days. Your statement shows: purchase price $750,000, plus $2,400 tax adjustment, plus $180 water adjustment, minus your $30,000 deposit, minus your $600,000 mortgage -- leaving $120,580 due on closing.
Ontario & GTA Context
In Ontario, the statement of adjustments is prepared by the buyer's lawyer in consultation with the seller's lawyer. It also includes the Ontario land transfer tax and Toronto municipal land transfer tax (if applicable) as separate line items. HST is included for new builds but not resale properties. Your lawyer will provide the statement a few days before closing so you can arrange funds.
How It Works in Practice
Review the statement of adjustments carefully when your lawyer sends it -- do not just sign off without understanding each line. The final amount owing can differ from your initial budget by several thousand dollars due to tax adjustments and other prorated costs. Wire your closing funds to your lawyer's trust account at least one business day before closing.
Common Questions
When do I receive the statement of adjustments?▾
What costs appear on the statement of adjustments?▾
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