What is a property tax proration at closing?
A property tax proration is the division of property tax responsibility between the buyer and seller at closing. Since taxes are paid in arrears or ahead for the year, the seller credits the buyer for the portion of the tax year the seller occupied the home but has not yet paid. Your closing statement will show this as a credit or debit.
Why It Matters
Understanding prorations helps you know exactly what you owe at closing and prevents double-paying taxes for periods you did not own the home.
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