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Tuesday Takeaway: How do Tax Pro-Rations Work?

Tuesday Takeaway: How do Tax Pro-Rations Work?

How do tax pro-rations work?

real estate closingReal estate taxes are released and due on November 1st of every year. They are paid in arrears, so the taxes we paid in November of 2019 are for the 2019 calendar year. At closing, the seller will generally give the buyer a credit based on last year’s tax bill if the property closed between January 1 and October 31. This is because the new year’s tax bill isn’t out yet and the buyer will be paying taxes in November, when due. Generally, if a property closes between November 1 and December 31, then the buyer will give a credit to the seller since the seller will be paying real estate taxes until the end of the year. This applies to ad-valorem taxes only. Non-ad valorem taxes have different payment schedules and are pro-rated accordingly.

For all your real estate closing questions, contact the Orlando Real Estate Attorneys at Nishad Khan today.

The Orlando Real Estate Attorneys at the Law Offices of Nishad Khan P.L. serve clients with Residential, Commercial, and Investment Real Estate Transactions. Let our expertise in Central Florida Real Estate help you.