Property tax proration calculator
Enter the annual tax, the tax year and the closing date. See each side's share and the credit at closing, whether taxes are paid in arrears or in advance. Switch to HOA dues for monthly, quarterly or yearly billing.
Who owns the closing day, the day count and how unpaid or prior-year taxes are handled are set by your contract and local custom. Your settlement statement controls. Estimate only.
To prorate property taxes, divide the annual tax by the days in the tax year to get a daily rate, then multiply by the days each party owns the home. With $730 in taxes, a calendar tax year and a September 1 closing, the buyer owns 122 days, or $244. If the seller already paid, the buyer credits the seller $244.
How to use the property tax proration calculator
Enter the tax and tax year
The annual tax bill and the date the tax year starts where the property is.
Set the closing details
Closing date, whether the seller has paid, and who is charged for the closing day.
Read the credit
See the daily rate, each side's days and share, and who credits whom at closing.
What the property tax proration calculator covers
Arrears or advance
Unpaid taxes give the buyer a credit; prepaid taxes give the seller one.
Closing day either way
Charge the closing day to the buyer or the seller, as your contract says.
Leap years handled
Uses the actual 365 or 366 days in the tax year, or a fixed 365 if your area does.
Any tax year
Calendar-year taxes or a tax year that starts in July, October or any other month.
HOA dues too
Prorate monthly, quarterly, twice-yearly or yearly dues for the current billing period.
- Formula
- Daily rate = annual amount ÷ days in the period; share = daily rate × days owned
- Day count
- Actual days (365 or 366) or always 365
- Federal tax rule
- For income tax deductions the seller is treated as paying through the day before the sale and the buyer from the date of sale
- Cost and privacy
- Free, no sign-up; runs in your browser
Questions about the property tax proration calculator
How do you prorate property taxes at closing?
Find the daily rate by dividing the annual tax by the days in the tax year. Multiply it by the days the seller owned the home in that year for the seller's share; the rest is the buyer's. The credit goes to whoever will pay, or already paid, the other side's share.
What does paid in arrears mean?
The tax for a period is billed after the period, so at closing the seller hasn't paid for the days they owned the home. The seller credits the buyer for those days, and the buyer pays the bill when it comes. If an earlier year's bill is also still unpaid, it's usually settled at closing too.
Who pays taxes on the day of closing?
It depends on the contract and local practice; some charge the closing day to the buyer and some to the seller. For federal income tax deductions, the buyer is treated as paying the tax from the date of sale, per IRS Publication 530.
Does a leap year change the proration?
If the tax year includes February 29 and your area uses actual days, the daily rate is the annual tax divided by 366. Some title companies always use 365; choose the basis your settlement agent uses.
How are HOA dues prorated?
The same way, over the billing period. HOA dues are usually paid in advance, so if the seller paid the current month or quarter, the buyer credits the seller for the days after closing.
Is this the final number?
No. It's an estimate. The settlement statement from the title or escrow company shows the proration that's actually charged.
Guides and features for this step of the deal
Where the rules come from
Let Closingbird keep every date for you
Closingbird reads the executed contract, fills in every deadline, party and amount, and reminds each deadline owner before the date. Calendar or business days, with weekends and US federal holidays skipped.
14 days free, no card needed.
Link to this tool
Useful for your agents or clients? Paste this into your website, newsletter or resource page.