The statement of adjustments is the most important document you will review before your mortgage closes. It is the final accounting of every dollar in the deal — the purchase price, your deposit credit, the mortgage funds, property tax adjustments, prepaid utilities, land transfer tax, and your lawyer’s fees. At the bottom is one number: the exact amount you need to bring to close.
Almost every home purchase in Canada produces a statement of adjustments. This guide breaks down every line so you know exactly what you are paying for and why.
What a Statement of Adjustments Looks Like
The document is split into two sides: credits to the buyer (money the buyer receives or is credited) and debits to the buyer (money the buyer owes). The difference is what you owe at closing.
Buyer’s Statement of Adjustments — Example
Purchase Details:
| Detail | Information |
|---|---|
| Property | 123 Maple Street, Toronto, ON |
| Purchase price | $750,000 |
| Closing date | July 15, 2026 |
| Annual property taxes | $5,400 |
Credits to Buyer (Reduces Amount Owed)
| Item | Amount |
|---|---|
| Deposit held in trust | $37,500 |
| New first mortgage | $600,000 |
| Property tax adjustment (seller owes for Jan 1–Jul 14) | $0 |
| Total credits | $637,500 |
Debits to Buyer (Amount Owed)
| Item | Amount |
|---|---|
| Purchase price | $750,000 |
| Ontario land transfer tax | $11,475 |
| Toronto municipal land transfer tax | $11,475 |
| Property tax adjustment (buyer reimburses seller for Jul 15–Dec 31) | $2,515.07 |
| Interest adjustment (7 days) | $517.81 |
| Title insurance | $375 |
| Legal fees + disbursements (incl. HST) | $2,486 |
| Registration fees (deed + mortgage) | $170 |
| Total debits | $779,013.88 |
Balance Due on Closing
| Calculation | Amount |
|---|---|
| Total debits | $779,013.88 |
| Less: Total credits | ($637,500.00) |
| Balance due from buyer | $141,513.88 |
This is the certified cheque or bank draft you deliver to your lawyer before closing.
Every Line Item Explained
Credits to the Buyer
Credits reduce the amount you need to bring to closing.
1. Deposit
| Detail | Explanation |
|---|---|
| What it is | The earnest money you paid when the offer was accepted |
| Typical amount | Negotiated; often a few percent of the price |
| How it appears | Full deposit credited to buyer |
| Example | $37,500 deposit on a $750,000 purchase |
The deposit is held in the listing brokerage’s trust account or the seller’s lawyer’s trust account. On closing, it is released and applied against the purchase price. See deposit vs down payment explained for the full breakdown.
2. Mortgage Proceeds
| Detail | Explanation |
|---|---|
| What it is | The mortgage funds your lender sends to your lawyer |
| How it appears | Full mortgage amount credited |
| Example | $600,000 first mortgage |
Your lender sends the mortgage funds directly to your lawyer’s trust account, usually the morning of closing.
3. Property Tax Credit (if seller underpaid)
If the seller has not paid their property taxes up to the closing date, the amount they owe is credited to you. You then owe the municipality for the full year and will pay it going forward.
Debits to the Buyer
Debits are amounts you owe.
4. Purchase Price
| Detail | Explanation |
|---|---|
| What it is | The agreed sale price in the offer |
| Always the biggest item | Yes |
| Example | $750,000 |
5. Land Transfer Tax (LTT)
| Province | LTT on $750,000 Purchase |
|---|---|
| Ontario | $11,475 |
| British Columbia | $13,000 (+ 20% foreign buyer if applicable) |
| Quebec (transfer duties) | Depends on the municipality’s brackets; see the Quebec calculator |
| Alberta | $0 (Alberta has no LTT) |
| Manitoba | $12,650 |
| Nova Scotia (Halifax, 1.5%) | $11,250 |
| New Brunswick | $7,500 |
| PEI | $7,500 |
| Saskatchewan | $0 (no LTT; only titles registration fee) |
Additional taxes: Toronto charges a second municipal LTT on top of Ontario’s. In BC, a further 2% applies to the residential value above $3 million, and foreign buyers pay an additional 20% in designated regions such as Metro Vancouver (both are provincial taxes).
First-time buyer rebates: Ontario refunds up to $4,000 of LTT; Toronto rebates up to $4,475 of municipal LTT. BC exempts the first $500,000 of value (worth up to $8,000) on homes up to $835,000, phasing out to $860,000.
6. Property Tax Adjustment
This is where most confusion occurs. The adjustment ensures each party pays property taxes for the days they own the property.
| Scenario | Who Pays Whom |
|---|---|
| Seller has prepaid taxes past closing date | Buyer reimburses seller |
| Seller has not paid taxes up to closing date | Seller credits buyer |
Calculation method:
| Step | Example |
|---|---|
| Annual property tax | $5,400 |
| Daily rate | $5,400 ÷ 365 = about $14.79/day |
| Seller owns Jan 1 – Jul 14 (195 days) | $5,400 × 195 ÷ 365 = $2,884.93 |
| Buyer owns Jul 15 – Dec 31 (170 days) | $5,400 × 170 ÷ 365 = $2,515.07 |
If the seller paid the full year ($5,400), the buyer reimburses the seller $2,515.07 for the portion covering the buyer’s ownership period. If taxes were billed but not yet paid, the credits flow the other direction.
Watch for the billing cycle: In most Ontario municipalities, property taxes are billed twice a year (interim in February, final in June). The adjustment depends on what the seller has already paid at closing.
7. Utility Adjustments
| Utility | How It Is Handled |
|---|---|
| Water/sewer | If billed in advance, seller gets credit for prepaid portion |
| Oil tank | If property has oil heat, buyer reimburses seller for oil remaining in tank |
| Propane | Same as oil — buyer pays for remaining fuel |
| Hydro/gas | Not adjusted — seller closes account, buyer opens new one |
| Condo fees | Adjusted if seller prepaid for the month |
Oil tank adjustment example:
| Detail | Amount |
|---|---|
| Oil remaining | 600 litres |
| Current price | $1.55/litre |
| Buyer reimburses seller | $930 |
8. Interest Adjustment
| Detail | Explanation |
|---|---|
| What it is | Prepaid interest from closing date to your first regular payment date |
| When it occurs | If you close mid-month (most closings) |
| Calculation | Daily interest rate × mortgage balance × number of days |
| Example | $600,000 × 4.50% ÷ 365 × 7 days = $517.81 |
See mortgage interest adjustment date explained for a full breakdown of how to calculate and minimize this cost.
9. Title Insurance
| Detail | Explanation |
|---|---|
| What it is | Insurance protecting you and your lender against title defects |
| Typical cost | $250–$500 for residential purchases |
| Who requires it | Most lenders require lender’s title insurance; buyer’s coverage is optional but recommended |
| Alternative | An up-to-date survey (more expensive, $1,500–$2,500) |
10. Legal Fees and Disbursements
| Component | Typical Cost |
|---|---|
| Lawyer’s fee | $1,000–$2,000 |
| Disbursements (searches, couriers, registration) | $400–$800 |
| Title search fee | $50–$100 |
| Tax certificate | $50–$100 |
| Utility certificate | $50 |
| Status certificate (condos) | $100–$200 (usually paid earlier) |
| Total legal costs (without a condo status certificate) | about $1,550–$3,050 |
11. Registration Fees
| Fee | Amount (Ontario) |
|---|---|
| Transfer/deed registration | $86.42 electronic registration fee |
| Mortgage registration | $86.42 electronic registration fee |
These are flat per-document fees set by the province (the statutory part is adjusted each November by half of CPI; from November 2, 2026 an electronic registration costs $86.42 ($72.75 statutory fee, plus $12.10 ELRSA service fee and $1.57 HST)) — they do not scale with the purchase price or mortgage amount. Registration fees vary by province. Your lawyer includes them as a disbursement.
The Trust Ledger Statement
Your lawyer also provides a trust ledger statement showing all money flowing through their trust account:
| Item | In | Out |
|---|---|---|
| Your certified cheque (balance due on closing) | $141,513.88 | |
| Mortgage funds from lender | $600,000.00 | |
| Deposit released from listing brokerage | $37,500.00 | |
| Payment to seller | $750,000.00 | |
| Land transfer tax — Ontario | $11,475.00 | |
| Land transfer tax — Toronto | $11,475.00 | |
| Legal fees + HST | $2,486.00 | |
| Title insurance | $375.00 | |
| Registration fees | $170.00 | |
| Property tax adjustment to seller | $2,515.07 | |
| Interest adjustment to lender | $517.81 | |
| Balance in trust | $0.00 |
Every dollar in equals every dollar out. The balance should be zero.
Common Mistakes and What to Watch For
Review Checklist
| Item to Verify | What to Check |
|---|---|
| Purchase price | Matches your offer exactly |
| Deposit amount | Matches what you actually paid |
| Mortgage amount | Matches your mortgage commitment letter |
| Property address | Correct legal description |
| Closing date | Matches agreement |
| Property tax amount | Matches municipality’s current assessment |
| Land transfer tax | Calculated correctly; first-time rebate applied if eligible |
| Lawyer’s fees | Match the quoted amount |
Common Surprises
| Surprise | Why It Happens |
|---|---|
| Amount due is higher than expected | Closing costs (LTT, legal fees, adjustments) were not budgeted separately from down payment |
| Property tax adjustment is large | Closing early in the year when seller has prepaid; or property tax reassessment |
| HST on legal fees | Lawyers charge HST on their fees — many buyers forget |
| CMHC premium not on statement | The premium is usually added to the mortgage balance rather than paid at closing |
| PST on CMHC premium | Ontario, Quebec and Saskatchewan charge provincial sales tax on the premium, and it is paid at closing |
Seller’s Statement of Adjustments
The seller gets their own statement of adjustments, showing proceeds from the sale minus their obligations:
| Item | Amount |
|---|---|
| Purchase price | $750,000 |
| Less: outstanding mortgage (paid out) | ($320,000) |
| Less: real estate commission (example: 4% + 13% HST) | ($33,900) |
| Plus: property tax adjustment (reimbursement) | $2,515.07 |
| Less: discharge fee (existing mortgage) | ($300) |
| Less: legal fees + HST | ($1,800) |
| Less: mortgage penalty (if applicable) | $0 |
| Net proceeds to seller | $396,515.07 |
Timeline: When to Expect the Statement of Adjustments
| Day | Event |
|---|---|
| 30–60 days before closing | Mortgage commitment confirmed; lender sends instructions to lawyer |
| 10–14 days before closing | Lawyer begins preparing documents |
| A few days before closing | Lawyer sends statement of adjustments to buyer for review |
| 1–2 days before closing | Buyer delivers the funds (certified cheque, bank draft or wire) to lawyer |
| 1 day before closing | Lawyer confirms all funds received; prepares for registration |
| Closing day | Mortgage registered, deed transferred, keys released |
How to Minimize Your Closing Costs on the Statement
| Strategy | Potential Savings |
|---|---|
| Close at the end of the month | Reduces interest adjustment |
| Claim first-time buyer LTT rebate | Up to $4,000 (ON) + $4,475 (Toronto) |
| Request title insurance instead of survey | Save $1,000–$2,000 vs new survey |
| Shop for a competitive legal fee | $500–$1,000 difference between lawyers |
| Close on a date aligned with property tax billing | Reduces property tax adjustment complexity |
Related Resources
Sources
The figures and rules on this page come from these sources, last checked against them between September 24, 2026 and September 29, 2026. How we check facts.
- Government of British Columbia: Property transfer tax
- Government of Ontario: Land Transfer Tax Refunds for First-Time Homebuyers | Land Transfer Tax
- Teraview: Bulletin No