Understanding Property Tax Prorations

Posted on | April 19, 2017

Through the process of a closing, your AmeriTitle escrow officer will prorate property taxes to the date of the closing. Typically, the seller pays the property taxes for each day they own the home during the tax year. The buyer will then pay the property taxes for each day they own the home for the remainder of the tax year. Your escrow officer will make sure these tax prorations are properly calculated.

Property tax year and property tax installment dates vary from state to state, so it’s important to know how tax prorations are calculated in the state(s) where you conduct real estate transactions. The following are the property tax year and property tax installment dates for the states AmeriTitle serves:

  • Oregon – The property tax year is July 1st through June 30th. Property tax installments become due on November 15th.
  • Idaho – The property tax year is January 1st through December 31st. The first half of property taxes become due on December 20th and the second half of property taxes become due on June 20th.
  • Washington – The property tax year is January 1st through December 31st. Property taxes become due on April 30th and October 31st of each year.

The following is a demonstration on how a tax proration would be calculated in the State of Oregon for a closing date of March 15th.

Annual tax bill is $1,200 (July 1st through June 30th)
$1,200 divided by 365 days = $3.2877 per day
March 15th through June 30th = 108 days
108 x $3.2877 = $355.07, which is charged to the buyer

In this scenario, the seller would be responsible for the property taxes from July 1st of the previous year to the closing date. The buyer would be responsible for the taxes from the closing date through June 30th the following year.

If you would like more information about tax proration calculations or to inquire about a specific transaction, connect with your local AmeriTitle representative.

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