- A statement of adjustments is the closing accounting that shows what the buyer owes the seller, or the reverse, after shared costs are divided as of the possession date.
- Manitoba land transfer tax is generally the buyer's cost and is based on fair market value on the date of registration, not simply the contract price.
- Read the statement against your purchase agreement and ask your lawyer about any line you do not understand before closing day.
A few days before closing, your lawyer will probably send you a document called a statement of adjustments. It is a page or two of figures, and it can look more confusing than it is.
This article explains in plain terms what the statement is for, the kinds of items that commonly appear on it, and how the final number is reached. Your own purchase agreement controls the details, so the points below are general.
This article covers the law of Manitoba.
What a statement of adjustments does
A home sale rarely lines up neatly with the way bills are paid. Property taxes, utilities and similar charges may be paid ahead of time or billed later. The statement of adjustments divides those costs between buyer and seller as of the day the buyer takes over the property, often called the adjustment date.
It also pulls the main money movements into one running total: the purchase price, the deposit already paid, the adjustments, and the amount the buyer must bring or the seller will receive. Both sides normally review and sign it before closing.
Items that commonly appear
Which items appear depends on the property and on your agreement. The table shows common examples and how they usually work.
| Item | How it is usually treated |
|---|---|
| Property taxes | Shared so each side pays for the period they owned the home |
| Utilities and similar charges | Shared up to the adjustment date, or settled by final meter readings |
| Condominium fees | Shared up to the adjustment date if the home is a condominium unit |
| Deposit | Credited to the buyer against the price |
| Mortgage proceeds | Counted as money the lender will advance for the buyer |
| Prepaid items | Credited to whoever paid for a period that extends past the adjustment date |
If you are buying a condominium resale, the seller must also give you a package of disclosure documents that includes budgets and the latest financial statements, which can help you understand the fee figures on the statement.
How the final amount is calculated
The arithmetic is simple even if the lines are many. Start with the purchase price. Add anything the seller has prepaid that the buyer should reimburse, and subtract anything the buyer is already credited with, such as the deposit. Then take off the mortgage money the lender is advancing. What remains is the balance the buyer needs to provide on closing.
For the seller, the same figures run in the other direction. The price is reduced by amounts owed to the buyer and by payments needed to clear the seller's own mortgage and other registered debts, leaving the net proceeds.
Land transfer tax and registration costs
Manitoba land transfer tax is payable by the transferee, who is the buyer, with some exceptions, and a registration fee is added. The tax is due when the transfer of title is registered.
The tax is calculated on the fair market value of the property on the date of registration, not simply on the contract price. For that reason, ask your lawyer to explain how the figure for tax was reached. Registrations are done electronically through Teranet Manitoba.
What to do before closing day
- Compare the price, deposit and possession date on the statement with your signed agreement.
- Ask which tax and utility figures are estimates and which are actual bills.
- Confirm the amount you must bring and how it is to be paid.
- Raise errors early, so they can be fixed before funds move.
- Ask what happens if a later bill turns out different from the estimate.
A lawyer can walk you through each line and confirm how your agreement treats anything unusual.
Frequently asked questions
Who prepares the statement of adjustments?
Usually the lawyers handling the sale prepare it, and the buyer's and seller's sides review each other's figures. Ask your own lawyer who is responsible in your transaction.
Can the figures change after closing?
Some figures are estimates, such as a tax bill not yet issued. Your agreement or your lawyer can explain how any later difference is handled between buyer and seller.
Does the buyer pay land transfer tax through the statement?
The buyer is generally the one who pays the tax, with some exceptions, and it is due on registration of the transfer. Whether it shows on the statement or is paid separately is a question for your lawyer.
What if I think there is a mistake?
Tell your lawyer right away, before closing day, and point to the line and the part of the agreement you rely on. Errors are far easier to correct before money is released.
Sources
- Government of Manitoba – Land Transfer Tax — gov.mb.ca
- Law Society of Manitoba – eRegistration FAQs — lawsociety.mb.ca
- Government of Manitoba – Buying a Condominium Unit — gov.mb.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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A home purchase with us is from $1,452.88, tax included. Third-party fees are extra.