How are property taxes shown on a statement of adjustments in Ontario?

Property tax adjustments on an Ontario statement of adjustments divide the year's property taxes between the seller and the buyer based on how many days each party owns the property during the tax year. The seller is responsible for taxes up to and including the closing date; the buyer is responsible from the day after closing.

Because property taxes are often paid in lump sums or installments that may not align perfectly with the closing date, an adjustment is needed. If the seller has already paid taxes for a period beyond the closing date, the buyer owes the seller a credit for the overpaid portion. If taxes are outstanding or only partially paid, the seller credits the buyer.

Early in the calendar year, the final property tax bill may not yet have been issued by the municipality. In those cases, the adjustment is often calculated based on the prior year's taxes and labelled as an estimate, subject to re-adjustment once the final bill arrives. Your lawyer will note whether the adjustment is final or estimated. In some municipalities, interim tax bills are issued before the final bill, adding complexity. Your lawyer will explain how the adjustment is calculated for your specific closing date and municipality.