# Property Tax Proration Calculator Split an annual tax bill between buyer and seller by days of ownership, on a 365-day or 360-day year. --- - **Canonical URL:** https://dothecalculation.com/calculators/property-tax-proration-calculator - **Category:** Real Estate & Property - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology --- ## Who Owes Which Part of the Property Tax Bill? Split an annual tax bill between buyer and seller by days of ownership, on either a 365-day or a 360-day year, and see which way the credit runs at closing. - Exact day counts from the closing date, leap years included - Both the calendar-year and banker-year conventions - Handles taxes billed in arrears and taxes paid in advance ## Quick Answer — How Is Property Tax Prorated at Closing? Divide the annual bill by the number of days in the tax year to get a daily rate, count the days each party owned the property, and multiply. The seller is responsible through the day before closing and the buyer from closing day onward, which is the convention on almost every settlement statement. **A $6,000 annual bill on a 22 July closing, 365-day year, buyer owning closing day:** • Daily rate — **$16.44** • Seller's days — **202**, worth **$3,320.55** (55.34% of the bill) • Buyer's days — **163**, worth **$2,679.45** Which way the money moves depends on when the jurisdiction collects. **In arrears**, the year is still unpaid at closing, so the seller credits the buyer $3,320.55 and the buyer later pays the whole bill. **Paid in advance**, the seller has already covered days the buyer will own, so the buyer reimburses the seller instead. On a **360-day** banker year the same closing gives a daily rate of **$16.67**, **201** seller days, and a seller share of **$3,350.00** — **$29.45** more. Neither convention is more correct; the contract or local practice decides. ## How to Use This Calculator: A July Closing on a $6,000 Bill Enter the **annual tax bill** for the property, not the assessed value or the millage rate. If the current year has not been billed yet, use the most recent bill — and expect the contract to require a true-up once the new assessment lands. Enter the **closing date**. The calculator counts days directly from 1 January, which means leap years are handled without you having to think about it: a 2028 closing on the same date gets 366 days in the year and a slightly lower daily rate. Choose the **day-count method**. The 365-day method counts the calendar. The 360-day method treats every month as exactly 30 days, which produces cleaner arithmetic and a marginally higher daily rate. Set **how taxes are collected** and enter anything already paid for the year. This is the input people get backwards, and it decides the direction of the credit rather than its size. Read the settlement adjustment. **$3,320.55, seller credits buyer** on the default settings. That figure appears on the closing disclosure as a credit to the buyer and a debit to the seller, and it changes the cash each side brings to the table by exactly that amount. ## The Formulas This Calculator Uses **Daily rate** = Annual tax bill ÷ days in year, where the year is 365, 366 in a leap year, or 360 on the banker convention. **Seller's days** = days from 1 January through the day before closing. **Buyer's days** = days in year − seller's days. **Seller's share** = Daily rate × Seller's days; the buyer's share is the remainder. **Taxes in arrears:** seller credit to buyer = Seller's share − amount already paid. **Taxes prepaid:** buyer credit to seller = amount already paid − Seller's share. On the 360-day method the day count uses 30 days per completed month plus the day of the month, so a 22 July closing sits on day 202 of the banker year against day 203 of the calendar year. After subtracting closing day itself that gives 201 seller days on the banker convention and 202 on the calendar one, and the gap between the two moves around as the closing date does. ## A Second Example: A Prepaid Bill and an Early-Year Closing Take a **$9,400** annual bill in a jurisdiction that collects **in advance**, where the seller has already paid the full year, closing on **15 March**. The daily rate is **$25.75**. The seller owned **73 days** and the buyer will own **292**, so the seller's share of the bill is **$1,880.00** and the buyer's is **$7,520.00**. Because the seller has already paid all $9,400, the buyer owes the seller for the days the buyer will own: **$7,520.00 flows from buyer to seller**. That is a substantial addition to cash needed at closing, and it is exactly the kind of line that surprises a buyer who budgeted only for the down payment and the lender's fees. Compare it with the arrears case at the same date. There, no money has been paid, so the seller would credit the buyer just **$1,880.00** — a swing of exactly the full $9,400 bill between two conventions that both describe the same tax year. Knowing which one applies in your county is not a detail. For everything else on the same statement, the [closing cost estimator](/calculators/closing-cost-estimator) totals the cash to close, and the [title insurance cost estimator](/calculators/title-insurance-cost-calculator) prices the other charge that scales with purchase price. ## Arrears, Advance, and Why Local Practice Governs Property taxes are collected differently across the country, and the difference is not cosmetic. Some states bill in arrears for a year that has already passed, sometimes more than a year behind. Others bill in advance for a year not yet begun. A few split the year into instalments that straddle both. Where taxes are in arrears, the seller has enjoyed a year of ownership without yet paying for it, so the credit runs to the buyer and the buyer pays the full bill when it arrives. Where taxes are prepaid, the seller has paid for time the buyer will own, so the reimbursement runs the other way. Getting the direction wrong does not produce a small error; it inverts a four-figure line item. The day-count convention is set the same way — by contract or by local custom. The gap is small on a single closing, **$29.45** on the worked example, and it is not zero. On a large commercial bill or a high-tax jurisdiction it is worth confirming rather than assuming. There is also the question of who owns closing day. The standard convention gives it to the buyer, and this calculator defaults to that. Some contracts assign it to the seller, which moves one day of tax across the table. It is a small number and it is the kind of small number that stops a settlement statement from reconciling. ## Limitations This prorates one annual tax bill. It does not handle instalment billing where two or more payments fall on different dates, special assessments, or improvement districts levied separately from the general tax, all of which appear on real settlement statements and are prorated by their own rules. It assumes the tax year runs with the calendar year. Several jurisdictions use a fiscal year — starting in July, for example — and the day counts there run from the fiscal start rather than from 1 January. It uses the current bill, and the current bill may not be what the property is assessed for after it sells. A sale often triggers reassessment, and the buyer's first full-year bill can be substantially higher than the seller's. Many contracts handle this with a post-closing true-up clause; this calculator prorates the number you give it. The output is an estimate for planning and for checking a settlement statement. The binding figures are the ones on the closing disclosure prepared by the settlement agent, computed under the contract and local practice that actually govern your transaction. ## Related Calculators Tax proration is one line among many at settlement. The [closing cost estimator](/calculators/closing-cost-estimator) totals buyer and seller charges, prepaid items and reserves into the cash actually needed to close. The [title insurance cost estimator](/calculators/title-insurance-cost-calculator) prices owner and lender policies, the other charge that scales with purchase price. To work out the annual bill this calculator prorates, the [property tax calculator](/calculators/property-tax-calculator) derives it from assessed value and millage rate, and the [mortgage calculator](/calculators/mortgage-calculator) shows how the escrowed portion of that bill lands in the monthly payment. Where taxes are collected monthly through an escrow account rather than paid directly, the [escrow calculator](/calculators/escrow-calculator) shows how the annual bill is split into the monthly deposit and the cushion a servicer is allowed to hold. ## Frequently asked questions ### How do you calculate prorated property taxes at closing? Divide the annual bill by days in the year for a daily rate, then multiply by each party's days of ownership. On a $6,000 bill closing 22 July with a 365-day year, the daily rate is $16.44, the seller owns 202 days worth $3,320.55, and the buyer owns 163 days worth $2,679.45. ### Who pays property taxes on the day of closing? By the standard convention the buyer does — the seller is responsible through the day before closing. Some contracts assign closing day to the seller instead, which moves one day of tax across the table. This calculator defaults to the buyer and lets you switch. ### What is the difference between the 365-day and 360-day methods? The 365-day method counts the actual calendar, including 366 days in a leap year. The 360-day method treats every month as exactly 30 days. On a $6,000 bill closing 22 July, the seller share is $3,320.55 on the calendar year and $3,350.00 on the banker year — a $29.45 difference. Local custom or the contract decides which applies. ### What does it mean when property taxes are paid in arrears? It means the bill covers a period that has already passed and has not been paid yet at closing. The seller therefore credits the buyer for the seller's share, and the buyer pays the whole bill when it arrives. Where taxes are prepaid, the reverse applies: the buyer reimburses the seller. ### Does the buyer or the seller get money at closing? It depends on the collection convention, not on the arithmetic. In arrears, money flows to the buyer — $3,320.55 on the worked example. Prepaid, it flows to the seller: on a $9,400 bill fully prepaid with a 15 March closing, the buyer owes the seller $7,520.00. ### Does a leap year change the proration? Slightly. A leap year has 366 days, which lowers the daily rate on the same annual bill and shifts the split by a fraction of a day's tax. The calculator handles it automatically from the closing date, so a 2028 closing gets 366 days without any adjustment on your part. ### What if the current year has not been assessed yet? Use the most recent bill and expect a true-up. Most contracts include a clause requiring the parties to re-prorate once the actual bill arrives, which matters most when a sale triggers reassessment and the buyer's first full-year bill is substantially higher than the seller's. ### Are special assessments prorated the same way? No, and this calculator does not handle them. Special assessments and improvement district levies are usually apportioned under their own rules — sometimes assigned entirely to the seller, sometimes assumed by the buyer with the remaining balance disclosed. Check the contract and the settlement agent's figures. ## Related concepts - **Daily Tax Rate** — The annual bill divided by days in the year. Every proration figure is this number multiplied by a day count, which is why the day-count convention matters. - **Arrears vs Advance** — Whether the jurisdiction bills for a period already past or one not yet begun. It decides which party credits the other, not how large the share is. - **Settlement Adjustment** — The single line on the closing disclosure that moves the tax credit between buyer and seller, changing the cash each side brings to closing. ## Related guides - [Home Affordability: Budget, Formula, and Calculator](https://dothecalculation.com/blog/finance/home-affordability-analysis) — Estimate a home-price range from income, debt, down payment, rate, taxes, and insurance, then test costs the DTC model does not include. - [How to Use Do The Calculation Calculators: A Practical Step-by-Step Guide](https://dothecalculation.com/blog/site-guides/how-to-use-calculators) — Learn the fastest reliable workflow for using Do The Calculation calculators, reading results, checking formulas, and using save, print, share, and export actions correctly. ## Related calculators - [Cash-on-Cash Return Calculator](https://dothecalculation.com/calculators/cash-on-cash-return-calculator) — Annual pre-tax cash flow over cash invested, shown next to cap rate and debt service coverage ratio. - [Real Estate Closing Costs Estimator](https://dothecalculation.com/calculators/closing-cost-estimator) — Estimate real estate closing costs, including buyer and seller expenses, prepaid items, reserves, and total cash needed to close on a home. - [Gross Rent Multiplier (GRM) Calculator](https://dothecalculation.com/calculators/gross-rent-multiplier-calculator) — Estimate property value and calculate the Gross Rent Multiplier from purchase price and annual rental income for quick investment screening. - [Broker & Agent Commission Split Calculator](https://dothecalculation.com/calculators/real-estate-agent-commission-calculator) — Calculate real estate listing and buying commissions and see how they split between agents and brokers on a home sale transaction. - [Seller Financing Amortization Calculator](https://dothecalculation.com/calculators/seller-financing-calculator) — Model owner-financed loan amortization schedules, balloon payments, and installment sale capital gains tax benefits for seller financing deals. - [Business Days Difference & Working Day Calculator](https://dothecalculation.com/calculators/date-difference-business-calculator) — Calculate business days difference and total calendar days between two dates, excluding weekends and custom holidays instantly. --- _This prorates a single annual tax bill on a calendar tax year. It does not handle instalment billing across multiple due dates, fiscal tax years that do not start in January, special assessments, or improvement district levies, all of which follow their own rules on a real settlement statement. It prorates the bill you enter, which may not be what the property is assessed for after a sale triggers reassessment — most contracts handle that with a post-closing true-up. Use the result to plan and to sanity-check a statement; the binding figures are the ones your settlement agent prepares under the contract and local practice that actually govern the transaction._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/property-tax-proration-calculator). Quote freely with attribution and a link to this page._