Property Tax Proration Calculator
Split the tax year between seller and buyer on either convention — 365-day or 360-day banker's — and get the DIRECTION right, because arrears and advance reverse who credits whom.
Property Tax Proration Calculator
Results recalculate instantly on every keystroke. Nothing you type is transmitted.
What this result does not account for
- Local custom varies widely; the contract governs.
- Assumes a calendar tax year — some jurisdictions use a fiscal year.
- Estimates based on a prior-year bill may be reprorated later.
In short: Direction matters more than arithmetic. On an 8,030 bill closing 15 June, the seller's 166 days are 3,652.00 — credited TO the buyer in arrears, but owed BY the buyer where taxes are paid in advance.
Formula
daily rate = annual tax ÷ 365 (or 360)
seller share = daily × days owned; shares sum to the bill
[('arrears', 'bill arrives after the period — seller credits buyer'), ('advance', 'bill paid before the period — buyer credits seller'), ('365-day', 'actual days, standard for annual items'), ('360-day', "banker's year, 30-day months")]
Worked Example
- Establish whether your jurisdiction bills in arrears or advance.
- Choose the day-count convention your contract specifies.
- Count the seller's days from 1 January to closing.
- Multiply by the daily rate.
- Apply the credit in the direction the basis requires.
An 8,030 annual bill on the 365-day method is 22.00 a day. A 15 June closing with the seller owning the closing day gives 166 seller days = 3,652.00, leaving 199 buyer days = 4,378.00, which sum exactly to the bill. In arrears the seller credits the buyer 3,652.00; in advance the buyer credits the seller 4,378.00 — the same closing, opposite directions. On the 360-day convention the daily rate is 22.31 and 165 days gives 3,680.42, a 28.42 difference. Assigning the closing day to the buyer moves exactly one day: 22.00.
Strengths & Limits Of This Model
Where this engine is strong
- Handles arrears and advance, and states the direction
- Runs both day-count conventions and prints the gap
- Asserts that the two shares sum to the annual bill
Where it stops
- Calendar year assumed
- Local custom varies
Practical Use Cases
Checking a settlement statement
Verifying the title company's proration.
Negotiating a contract
Fixing the convention before closing.
Estimating seller net proceeds
Sizing the tax credit that reduces the cheque.
Budgeting as a buyer
Knowing whether a credit is coming or a debit.
Commercial closings
Where a single day of tax is material.
Methodology & Editorial Standards
The daily rate divides the annual bill by 360 or 365 as selected, and the seller's share is that rate times the days owned, adjusted by one day where the contract assigns the closing day to the buyer. Seller and buyer shares are asserted to sum to the full bill, since proration divides a fixed amount and never creates tax. The direction of the credit is driven by the arrears or advance basis and stated explicitly in settlement-statement terms, because reversing it moves twice the amount at stake.
Computation runs in IEEE-754 double precision at full internal precision; rounding to two decimal places occurs strictly at the display layer, so no cumulative drift enters the result. All monetary outputs use accounting presentation — grouped thousands, two decimals, negatives in parentheses — so figures can be transcribed directly into a model or working paper. Division-by-zero and out-of-domain inputs return an em-dash rather than a misleading number.
This engine was reconciled against an independent reference implementation and hand-verified for the worked example above before release. Our full five-stage review process is published on the About Us page.
Disclaimer. This calculator is provided for informational and modelling purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Verify all figures with a qualified professional before acting on them.
Property Tax Proration Calculator — 10 Expert FAQs
10 analyst-written answers to the questions practitioners actually ask — optimised for voice and answer-engine retrieval.
How are property taxes prorated at closing?
The annual bill is divided by 365 or 360 to give a daily rate, then multiplied by the days each party owns the property. The shares always sum to the full bill. The direction of the credit depends entirely on whether your jurisdiction bills in arrears or in advance.
What does paid in arrears mean?
That the tax bill arrives after the period it covers. The seller has therefore enjoyed months of ownership without paying for them, so at closing the seller credits the buyer for those days and the buyer pays the whole bill when it is issued.
What if taxes are paid in advance?
Then the direction reverses. The seller has already paid for a period they will not own, so the buyer reimburses the seller for the unused portion. This is the single most common source of confusion in proration, because the arithmetic looks identical and the money moves the other way.
Should I use 365 or 360 days?
Whichever your contract specifies, or your local custom requires. The 365-day method uses actual days and is standard for annual items in residential closings; the 360-day banker's year is common for mortgage interest and is the local custom in several states. Neither is more correct.
Does the closing day belong to the buyer or seller?
It varies by contract and by local practice, with the seller owning the closing day being the more common convention. It moves exactly one day of tax, which is negligible on a house and can matter on a large commercial parcel.
What if the current year's bill has not been issued?
Title companies normally estimate using the prior year's bill, and many contracts provide for a post-closing adjustment once the actual figure is known. Ask whether your contract includes a reproration clause, because without one the estimate is final.
Are HOA dues prorated the same way?
The mechanics are the same but the basis usually differs, since association dues are almost always paid in advance and are typically prorated on the actual days in the month or quarter rather than an annual figure. The direction is normally buyer reimbursing seller.
What happens with a leap year?
Strictly the 365-day method becomes 366, though many contracts and title practices simply use 365 regardless. The difference is a fraction of a day's tax and rarely worth arguing about, but it should be consistent between the two sides.
Who calculates the proration?
The title company or closing attorney, using the county assessor's figures. It is worth checking their arithmetic and especially their direction, because an error in direction is worth twice the credit and is easy to miss on a crowded settlement statement.
Does proration change how much tax is owed?
Not at all. The total remains exactly the annual bill; proration only decides who bears which portion of it. Anyone presenting a proration where the shares do not sum to the bill has made an arithmetic error.