How are property taxes split between buyer and seller at closing in Ontario?

Property taxes in Ontario are adjusted as of the closing date on the statement of adjustments. If the seller has paid property taxes for a period that extends beyond closing, the buyer reimburses the seller for the unused portion. Conversely, if taxes are owing for the period up to closing, the seller credits the buyer so the buyer can make the full payment.

The challenge is that municipalities often issue tax bills in installments for the full year, and the exact annual amount may not be confirmed until spring. When the final tax amount is unknown at closing, lawyers commonly use the prior year's taxes as the basis for the interim adjustment and revisit the calculation once the final bill is issued — sometimes requiring a post-closing top-up payment.

Your lawyer will include the property tax adjustment in the statement of adjustments so you can see exactly what amount is being credited or debited at closing. If you are selling a condominium, common-expense fees are adjusted on the same basis.