How to Compute Prorated Property Taxes

how to figure property tax

Selling your home usually leads to prorating property taxes between the buyer and seller.

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States and localities usually assess property taxes on an annual basis, which is convenient if you owned the property for the entire year. However, if you buy or sell the property mid-year, you'll have to figure your prorated share of the property taxes. To prorate the taxes, you need to know the annual property taxes levied and the property tax year for each taxing governing body. Your state or locality might not use the same calendar year, so you may have to calculate the prorated portion of each property tax separately.

Step 1

Count the number of days that you owned the property during the property tax year for each property tax year. For example, the county might use a tax year from May 1 through April 30 and your school district might go from Aug. 1 through July 31. As a result, if you sold your home on Aug. 15, you would be responsible for 107 days of county property taxes and 15 days of school

district property taxes. If you bought the home, you would be responsible for 258 days of county taxes and 350 days of school taxes.

Step 2

Divide each property tax by 365 to find the property tax per day. For example, if the property tax for the entire year is $2,920 for the county and $1,460 for the school district, divide $2,920 by 365 to get $8 per day for the county tax and $1,460 by 365 to get $4 per day for the school district tax.

Multiply the number of days you owned the property by the tax per day to find the prorated property tax for each governing body. In this example, multiply the county rate of $8 per day by 107 days to find you owe $856 for the county. Then, multiply the school district rate of $4 per day by 15 days to find you owe $60 for the school district.

Add the prorated taxes for each governing body to find your total prorated taxes. In this example, add $856 for the county plus $60 for the school district to find the total prorated property taxes equal $916.


Category: Taxes

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