What Is a Statement of Adjustments in a BC Home Purchase?

A few days before completion, your lawyer or notary will likely send you a statement of adjustments. It is a page of figures, and it can be confusing to see amounts added and subtracted that you did not expect.

This article explains what the statement does, the common line items and the reasons the numbers can change between drafts. Your contract sets the details, so use this as a general guide and ask questions about anything unclear.

This article covers the law of British Columbia.

What the statement is for

When a home changes hands, some costs have already been paid or billed for a period that overlaps both owners. A statement of adjustments shares those costs between you and the seller, and how they are divided depends on your contract. Which date is used depends on your contract, so check it and ask your lawyer or notary to confirm the date and how it was applied.

The statement ends with a bottom line showing how much more you need to bring, or in some cases the amount due to you. Your legal professional uses it to arrange the funds on completion.

Common line items

Other lines may appear depending on the property, such as special levies or a home owner grant. Ask your lawyer or notary to explain any line that is unfamiliar.

Why the amounts shift

• Tax or fee bills may not yet be issued, so estimates are used and later corrected.
• The adjustment date or completion date moves.
• The seller pays or does not pay a bill before completion.
• Strata fees or levies are confirmed after a closer look at the strata's records.
• Your lender changes the mortgage amount or timing.

If you are buying a strata lot, the strata corporation must give an Information Certificate within one week of a request by an owner, a purchaser or a person they authorize. It is commonly used to review the strata's finances and rules. How it relates to the strata fee lines on your statement depends on your situation, so it is worth confirming with your lawyer or notary.

What is not on the statement

Some closing costs are separate from the adjustments between you and the seller. Property transfer tax is charged on fair market value, at 1% on the portion up to $200,000, 2% on the portion above $200,000 up to $2,000,000 and 3% on the portion above $2,000,000. A further 2% applies to the residential value above $3,000,000, and for mixed-class property only the residential portion is counted. The buyer must pay it and file a return when applying to register. It is normally paid through the conveyancer on completion as a closing cost. Your lawyer may show it on a separate accounting.

Exemptions may reduce it. For example, a first-time buyer exemption can apply to properties registered on or after April 1, 2024 with a fair market value of $835,000 or less, subject to eligibility rules. Where it applies, your legal professional applies it on the return.

What to do next

• Read the statement as soon as you receive it and compare it to your contract.
• Confirm the adjustment date and ask why if it is not what you expected.
• Ask which figures are estimates and could change.
• Check the property tax and strata fee lines against recent bills or the Information Certificate.
• Confirm the final amount you need to deliver and how to send it.
• Ask to see a revised statement if anything changes before completion.

Frequently asked questions