Understanding Property Tax Prorations

Posted on | November 16, 2015

Through the process of a closing, your Escrow Officer will prorate property taxes to the date of the closing. The seller is responsible for the property taxes from July 1st to the closing date. The buyer is responsible for taxes from the closing date through June 30th. If the buyer is including taxes in their mortgage payment, the lender may collect reserves to pay the taxes on the buyer’s behalf when they become due.

The property tax year is July 1 through June 30

Taxes become due and payable on November 15

Example:

Closing date is March 15

Annual tax bill is $1,200 (July 1 through June 30)

$1,200 divided by 365 days = $3.2877 per day

March 15 through June 30 = 108 days

108 x $3.2877 = $355.07 charged to the buyer

  • The seller pays the property taxes for each day they own the home.
  • The buyer pays the property taxes for each day they own the home.
  • Your Escrow Officer will make sure this is properly calculated.

TaxProrationsImage

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*This information is specific for Oregon only. Property tax due dates vary from state to state.

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