How Are Property Taxes Prorated at Closing?
By JC Pacific Corp Published 2026-09-01 Last professionally reviewed: September 2026
Property-tax prorations allocate the existing tax obligation between buyer and seller based on the closing date, payment status and transaction terms.
Paid vs. Unpaid Taxes
If the seller has paid taxes covering a period after closing, the buyer may reimburse the seller for the buyer's ownership period. If taxes covering the seller's ownership period remain unpaid, the seller may provide a credit or payment through escrow.
Does the Proration Use the Buyer's New Assessed Value
The closing proration commonly uses the available existing tax bill. A later reassessment and supplemental bill may be separate.
Frequently Asked Questions
Does the seller pay all taxes for the year?
No. The expense is generally allocated by ownership period, subject to the contract.
Why can a supplemental bill arrive later?
A change in ownership can trigger reassessment after closing.
Is the lender's tax estimate the final bill?
No. Lender projections can differ from future county bills.
Budget for property taxes based on the purchase and likely reassessment, not solely the seller's historic tax amount.
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A note on legal advice: These guides provide general, educational information about California real estate practice. They are not legal advice and do not create an attorney-client relationship. Mortgage information is general education, not individualized lending, tax or legal guidance. For advice about your specific offer, contract, closing or financing, consult a qualified California real estate attorney and a qualified mortgage professional.