What’s a statement of adjustments?
“What’s a statement of adjustments?” — The single page that can cost or save you thousands at closing in Milton, ON.
Why you must read this now
Buying or selling a home in Milton, Ontario? The closing day is ruthless. One small miscalculation on the statement of adjustments and you either overpay or leave money on the table. This post explains, in plain terms, what a statement of adjustments is, how it’s calculated in Milton, ON, common pitfalls, and exactly how to avoid surprises.
I work with Milton buyers and sellers every week. I’ll cut through the confusion and give you the exact items to watch, examples you can use, and the checklist your lawyer will follow.
What is a statement of adjustments?
A statement of adjustments is a legal accounting document used at closing. It lists every monetary item that must be credited or debited between buyer and seller so both parties leave closing with the correct net amounts.
Think of it as the final bill for the deal. It reconciles:
- Purchase price and deposit
- Adjustments for property taxes, utilities, condo fees
- Credits for prepaid items
- Debits like unpaid bills, outstanding municipal charges
In Ontario, the statement is normally prepared by the closing lawyer (or notary) but realtors often create preliminary estimates so clients aren’t surprised.
Why statements of adjustments matter in Milton, Ontario
Milton has grown fast. That growth changes tax cycles, utility billing, and development charges. A few Milton-specific facts:
- Property taxes in Milton are billed by the Town of Milton and Halton Region. Buyers and sellers must prorate property taxes based on closing date.
- Hydro and water billing cycles in Halton can differ from other regions. Outstanding municipal charges or utility arrears must appear on the statement.
- If you’re buying a new build in Milton, HST rules and rebate applications apply. The statement must reflect any HST treatment and builder credits.
- No municipal land transfer tax in Milton, but Ontario’s provincial land transfer tax applies. That tax is a buyer cost and shows on closing statements.
Get these local items wrong and the numbers won’t add up.
Who prepares the statement and when?
Your closing lawyer prepares the final statement of adjustments, usually the day before or the morning of closing. Realtors and mortgage brokers often provide an estimated statement earlier so buyers can arrange funds.
Why the lawyer? Because they need up-to-date figures: final mortgage payout, exact property tax account status, municipal arrears, title charges, and last-minute credits or debits.
What’s included — the checklist
Common line items you’ll see on a Milton closing statement:
- Purchase price (credit to seller, debit to buyer)
- Deposit paid (credit to buyer against purchase price)
- Prorated property taxes (seller credit / buyer debit)
- Utilities (hydro, water) adjustments
- Condo common expenses or fees (if applicable)
- Land transfer tax (Ontario) — buyer debit
- Legal fees and disbursements (who pays varies)
- Mortgage payout and outstanding encumbrances (seller debit)
- HST treatment on new homes or commercial properties
- Final meter reads or outstanding utility arrears
- Adjustments for rents, security deposits or tenant charges
Every dollar is listed as either a credit or a debit so the final net to each party is crystal clear.
How the math works — a simple example
Concrete numbers remove confusion. Example: purchase price $700,000. Closing date: June 15. Property taxes for the year: $5,000 (billed Jan 1).
- Purchase price: $700,000 (buyer owes this)
- Deposit: $35,000 (already paid by buyer = credit to buyer)
- Property tax proration: Seller owned the property from Jan 1 to June 15. Buyer owns from June 16 to Dec 31. Seller owes buyer the portion buyer will pay later or vice versa depending who prepaid.
Calculate prorated tax: 166 days seller (Jan 1–Jun 15) vs 199 days buyer (Jun 16–Dec 31) in a non-leap year. Seller’s share = 166/365 x $5,000 = $2,279. Buyer’s share = $2,721.
If seller already paid full $5,000 for the year, buyer must reimburse seller $2,721 at closing (debit to buyer, credit to seller). The statement shows the numbers so there’s no argument.
Other lines (land transfer tax, legal fees, adjustments for utilities) are added and netted to show final cash to close for buyer and net proceeds for seller.
Common mistakes buyers and sellers make in Milton
- Assuming taxes prorate by month instead of by exact days. That can shift hundreds.
- Forgetting regional charges: condo specials, development levies, or outstanding municipal fees tied to the property.
- Not accounting for HST on new homes. Buyers expect a simple adjustment, but builder credits and HST rebates change the final numbers.
- Using outdated utility or mortgage payout figures. Lawyers need final numbers — estimates lead to surprises.
- Ignoring arrears. Unpaid utility bills or property tax arrears stay with the property and can appear as seller debits on the statement.
Avoid these by asking for a preliminary estimate early and a final statement from your lawyer the day before closing.
Disputes and corrections — what to do if numbers look wrong
If you spot an error, act fast. The closing lawyer is the first point of contact. Common fixes:
- If a prorated figure is wrong, provide billing evidence (tax bill, utility invoice).
- If a mortgage payout is incorrect, ask the seller’s lawyer to confirm a fresh payout statement.
- If a municipal charge appears incorrectly, request confirmation from the Town of Milton or Halton Region.
Most errors are clerical and quickly fixed before funds are exchanged. That’s why a review before signing matters.
Practical tips to remove risk
- Request a preliminary statement early (your realtor should provide one).
- Confirm property tax billing dates with the Town of Milton.
- Ask the builder for HST reconciliation if buying new construction.
- Require your lawyer to send the final statement 24 hours before closing for review.
- Keep a buffer in your closing funds for small last-minute adjustments.
How I help Milton buyers and sellers (local advantage)
I handle Milton transactions daily. That gives three advantages:
- Local accuracy — I know the Town of Milton billing cycles, common utility providers, and typical developer credits.
- Trusted partners — I work with experienced Milton closing lawyers who produce clean, accurate statements fast.
- No surprises — my clients receive a clear pre-closing estimate and a checklist of items to confirm so final adjustments match expectations.
If you want someone who will proactively sort the statement of adjustments and protect your money at closing, contact me.
Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca
FAQ — Closing Process and Statement of Adjustments in Milton, ON
Q: Who prepares the statement of adjustments?
A: The closing lawyer prepares the final statement. Realtors often prepare preliminary estimates.
Q: When will I see the final statement?
A: Typically the day before or the morning of closing. Ask your lawyer to send it 24 hours early.
Q: Do buyers pay land transfer tax in Milton?
A: Yes. Ontario’s provincial land transfer tax applies. Milton has no separate municipal land transfer tax.
Q: How are property taxes prorated?
A: By exact days of ownership in the year. The statement will show the seller’s and buyer’s shares based on closing date.
Q: What about condo fees or special assessments?
A: Condo common expenses are prorated. Special assessments or unpaid condo fees are usually charged to the seller unless negotiated otherwise.
Q: Does HST appear on the statement?
A: Only when applicable (new homes, commercial transactions). It must be listed and any rebates or builder amounts shown.
Q: What if the final statement shows more money due at closing than I expected?
A: Contact your lawyer immediately. They’ll verify figures, call the seller’s lawyer, and correct any errors or explain last-minute adjustments.
Q: Can I negotiate adjustments after the statement is prepared?
A: Yes — but ideally before closing. Last-minute negotiations are possible but complicate funding and timing.
Bottom line
The statement of adjustments is not paperwork to skim. It’s the final reconciliation that decides who pays what at closing. In Milton, ON, local tax cycles, utilities, HST on new builds, and municipal charges create specific risks. Use a local realtor and lawyer who know the details.
If you want a no-nonsense review of your next closing statement or a clear estimate before you fund, I’ll handle it. No fluff. No surprises.
Contact: tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca
