Example of a proration of property taxes
|
Property tax of the lot or home for the year: |
$2,760.00 |
|
Closing date: |
April 30th |
|
Number of days seller owned property (Jan1-April 30) |
120 days |
|
Calculation based on 360 days per year: 2760:360x120 Seller's prorated amount of the property tax: |
$ 920.00 |
The Seller is debited with the amount while the Buyer receives a tax proration credit on the Settlement Statement at closing in the amount of $920.00. At the end of the year the buyer has to pay the full year tax. This way he effectively only paid the difference of $1,840.00 for the 8 months he owned it starting May 1st.