How to Prorate Property Taxes at Closing
When someone has sold their house or any property, that individual might already have paid property tax due to the month of closing. Most of the sales contracts depending upon the laws of the state require a buyer to pay a prorated amount of the portion of property taxes that have been paid already for reimbursement. However, it is a very complicated procedure as prorating the buyer’s portion of the tax bill requires different steps of calculation in which you have to divide, multiply and subtract. However, if we look at it closely, it is not that complicated if a few steps are followed.
In order to find information (previous year’s tax bill for instance) on the property tax, you can visit your county’s property appraiser’s website. The prorated amount that has been calculated will be the debit to the seller and act as a credit to the buyer. If the seller has already paid off taxes before closing, the case will be the other way around. Make sure that you find out the date at which your state sends out property tax bills. Make sure that you keep the closing statement with you all the time as it is a very important document that you might be needing in the future if you are asked to give evidence that you have paid your share of the taxes.
Instructions
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1
First of all, it is important you have to determine the amount of real estate taxes that have been for the property year. In most cases, the seller will have a copy of the tax bill with him.
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2
Then, determine the number of days, excluding the date of sale in which the seller used to own the home or any property that he sold during the property tax year.
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Now, divide the figure from the number of days, excluding of course, the date of sale in order to determine the percentage of the tax year in which the seller still owned that property.
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4
Now, multiply the total property tax bill by the percentage you calculated. The result would be the amount of property tax that the seller should have paid. In case the seller has not been able to pay this amount, he will have to reimburse the buyer for the difference between what he has actually paid and what he is required to pay.
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Now, subtract the resulting amount from the total property tax bill and the difference that you get will be the prorated amount that the buyer will need to pay at closing.
 on the property tax, you can visit your county’s property appraiser’s website. The prorated amount that has been calculated will be the debit to the seller and act as a credit to the buyer. If the seller has already paid off taxes before closing, the case will be the other way around. Make sure that you find out the date at which your state sends out property tax bills. Make sure that you keep the closing statement with you all the time as it is a very important document that you might be needing in the future if you are asked to give evidence that you have paid your share of the taxes.Next%20stop%3A%20Pinterest "Pin It")
