Monday, February 3, 2014

HELP! My husband and I have our home under contract to close in March. How do we calculate our property tax obligation?


Hi Sue,

Hopefully your title company or closing attorney will verify this for you. I suggest you contact them 1st thing in the morning.

To calculate your property tax obligation. Take the appraised value in the last tax year (2013) divide the number by 365 then multiply by the number of days in the year you own the home for example with a closing of March 17, 2014:


Taxes based on tax authority appraisal value : $10,000

$10,000/365 = $27.40 daily tax rate

$27.40 * 76 Days (include the closing day) = $2082.40

So this is the amount you will credit buyers at closing so that when the taxes are due the 3 of days you owned the home in 2014 is taken into account. Most closings will also have a document that both buyer and seller sign that is basically an outside agreement that if there is an underpayment of taxes at closing the sellers agree to reimburse the difference to the buyers. Same if there is an overpayment of taxes at closing the buyers will refund the sellers.

In order to make this happen both buyer and seller are responsible for contacting the other party with an accounting of actual taxes based on new tax appraisals since most taxing authorities do not typically set tax rates until fall time frame.

I hope this information helps you in your planning. If you have any other questions or need assistance in a referral for Realtor® services for your next home please contact me!

Kind Regards,

Bob Kenney, Realtor®

Reilly Realtors


Mobile/Text : 512-922-4922

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