Key takeaways
- The purchase price is the starting point; credits and adjustments determine the amount payable to the seller.
- A credit to one party generally increases what that party receives or reduces what it pays.
- A tax bill shows charges, but it does not by itself establish how much has actually been paid.
- Estimates can require a later readjustment when final figures become available.
On this page
1. What is the statement used for?
2. Which items commonly appear?
3. How does the property tax adjustment work?
4. Can you show a simple closing calculation?
5. Is that balance the amount I bring to my lawyer?
6. What should I check before signing?
What is the statement used for?
The statement translates the financial terms of your Agreement of Purchase and Sale into the closing calculation. The seller’s lawyer normally prepares it, and the buyer’s lawyer reviews it against the agreement and available supporting records. Your lawyer should explain the material adjustments as part of the transaction. [1]
It deals with amounts between the buyer and seller. Some are straightforward, such as the purchase price and deposit. Others allocate expenses that cover a period straddling the closing date.
Think of a prepaid annual bill. If the seller has paid for a period during which the buyer will own the home, the seller may receive a credit for the buyer’s share. If an amount attributable to the seller remains unpaid and will fall to the buyer, the adjustment may run the other way. The agreement determines the allocation, including treatment of the closing day.
Which items commonly appear?
Typical resale items include:
- Purchase price: the agreed amount, including any signed price amendment.
- Deposit: money already paid under the agreement and credited toward the price.
- Property taxes: an allocation based on the applicable tax year, payment history and closing date.
- Condo common expenses: an adjustment where the seller has paid fees covering part of the buyer’s ownership period.
- Other agreed amounts: for example, an agreed fuel adjustment or a specific credit negotiated in an amendment.
New-construction statements can contain substantially more items, including taxes, levies, utility-related charges and contractual adjustments. Those charges need to be checked against the builder agreement, its schedules and any negotiated caps. A builder’s statement is not proof that every listed charge is authorized.
How does the property tax adjustment work?
Your lawyer needs to establish both the tax obligation and the payments applied to it. An interim or final bill may show amounts billed rather than amounts received. The municipality’s account information and payment records matter. [2]
For example, an annual bill may deduct “interim billing” when calculating the remaining instalments. That deduction can reflect taxes already billed earlier in the year. It does not necessarily mean those earlier instalments were paid.
The allocation between buyer and seller must therefore use the available payment information, not an assumption drawn from that wording. If a payment is reversed or a final assessment changes the figures, the lawyers may need to revisit the adjustment.
Can you show a simple closing calculation?
Suppose the agreed price is $800,000 and the buyer has already paid a $40,000 deposit. Assume the buyer must also reimburse the seller $600 for properly documented prepaid expenses.
| Item | Effect on amount payable to seller |
|---|---|
| Purchase price | $800,000 |
| Deposit credit | −$40,000 |
| Prepaid-expense credit to seller | +$600 |
| Balance payable to seller | $760,600 |
This is an illustration, not a quote for a particular transaction. It leaves out other possible adjustments and the buyer’s own closing expenses. If the $600 were instead a credit to the buyer, the balance would be $759,400.
Is that balance the amount I bring to my lawyer?
Usually not. The statement of adjustments gives the amount payable to the seller after the deposit and agreed adjustments. Your lawyer’s funding calculation also takes into account the mortgage advance available, land transfer taxes, legal fees, disbursements and other authorized payments. [1]
For instance, a $600,000 net mortgage advance does not mean you bring only the purchase-price difference. You must also cover closing costs and any lender deductions that reduce the advance. Your lawyer will provide the amount and payment instructions for your file. [3]
On a sale, the balance received from the buyer is not necessarily your net proceeds either. Mortgage payouts, commission, legal expenses and other authorized payments may still need to be deducted.
What should I check before signing?
Check the price, deposit, closing date and any credit agreed in writing. Provide the latest tax bill, payment confirmations and relevant condo-fee information. Tell your lawyer if the deposit amount changed, an instalment was missed or a payment plan was cancelled.
If a number looks unfamiliar, ask what it represents and which record supports it. It is easier to correct the calculation before money moves than to seek a refund afterward. Keep the statement with your final reporting documents.
About the author — Gathyayini Manoharan
Gathyayini Manoharan is a lawyer licensed by the Law Society of Ontario (LSO #75591T, licensed since 2018) and a Practice Lead at iClosed. Her practice is Ontario residential real estate, and she works on purchase, sale and refinance files from retainer through to reporting. Her Law Society record can be verified at https://lsodirectory.lso.ca/en-US/licensee-detail/?lawsocietynumber=75591T. This article is general information about Ontario law and practice, not legal advice. It does not create a lawyer-client relationship. For advice on your own transaction, speak with a licensed Ontario real estate lawyer.
Sources
1. Law Society of Ontario — Residential Real Estate Transactions Practice Guidelines. — https://lso.ca/lawyers/practice-supports-and-resources/practice-area/real-estate-law/residential-real-estate-transactions-practice-guid
2. City of Toronto — Property tax bill types. — https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-bill-types/
3. Financial Consumer Agency of Canada — Buying a home. — https://www.canada.ca/en/financial-consumer-agency/services/buying-home.html
This article provides general information about Ontario law and closing practice as of October 26, 2026. It is not legal or tax advice and does not create a lawyer-client relationship. Your agreement of purchase and sale, your lender’s instructions and your own circumstances control what applies to you. Rates, thresholds and rules change — confirm current figures before relying on them.