Understanding tax proration

What is tax proration - tax prorations explained

During the escrow process property expenses such as property taxes and homeowner association dues will be divided between sellers and buyers so that they each pay only for the days they own the property.

How is it determined who pays what? That depends on when the property closes escrow.

Tax year starts on July 1 and the first installment is due on November 1 of every year. The second installment from the period between January 1 and June 30th needs to be paid by April 10th.

If the seller paid the first installment taxes are paid until January 1st. If the buyer takes possession of the property during this period the buyer will need to pay the seller for the days already paid. The proration is a credit to the seller and a charge to the buyer. For instance. if the property closes on November 10 the proration will be calculated from November 10 to December 31. The seller will be credited 55 days of property expenses and the buyer will be charged.

If the property closes escrow on January 10 the seller didn't pay property taxes on the first 10 days of the second installment period. Tax proration will reimburse the buyer for the days the seller owned the property.