Recording a Land Purchase

Your land purchase should be recorded from the Statement of Adjustments that you receive from your lawyer.  All the information included on the statement will be used to create the necessary transaction to book the purchase of your land.

The mortgage will include a $150 admin fee, taking the total mortgage to $1,099,837.19.

You will also want to make sure to have a copy of your lawyer fees & disbursements.

When the purchase of land is entered, there are strict rules about what can be expensed, and what must be included in the purchase price of the land.

1) All expenses related to the purchase must be added to the value of the land (such as lawyer fees and any real estate commissions paid).

2) All expense related to the mortgage may be claimed (such as mortgage admin fees).

3) Any amounts paid to repay the vendor for prepaid expenses can be expensed (such as property taxes or utilities).

4) All GST can be claimed back as an ITC.

There will be several transactions that relate to land purchases.  In the example above, there was a down payment, the purchase of the land itself, and the lawyer fees (since they are generally required to be paid separately).

Land down payment:

Land purchase:

Lawyer fees:

Last updated on June 4, 2020 by FCC AgExpert