Property Tax Proration Calculator
Split an annual property tax bill between buyer and seller at closing.
What it does
A property tax bill covers a fixed period, but ownership can change in the middle of it. Proration is the closing adjustment that assigns the bill to the seller and the buyer by day. The county still bills one owner of record; the proration is a private settlement between the two parties, usually handled in escrow.
The direction of the credit depends on when the tax is paid. With arrears billing, the bill arrives after the period ends or in installments during it. The seller has used part of the period but has not paid for it, so the seller credits the buyer for the seller's days. With advance billing, the seller has already paid the full bill, so the buyer credits the seller for the days after closing.
The day count matters. This calculator treats the tax period as inclusive, so a January 1 to December 31 period has 365 days in a common year and 366 in a leap year. The seller owns the period start through the day before closing. The buyer owns the closing date through the period end. That convention gives the buyer the closing day, which is common in many contracts but not universal.
The default example is a $4,380 annual bill for January 1 to December 31, 2026, with a June 15 closing and taxes paid in arrears. The daily rate is $12.00. The seller owns 165 days, the buyer owns 200 days, and the seller credits the buyer $1,980.00 at closing.
A closing statement is a contract, not a formula. Some contracts use a 360-day banker's year, some use a fiscal year that starts July 1, some split the bill into two installments with different due dates, and some make the seller responsible for the day of closing. Supplemental assessments, special districts, and escrow impounds can add lines that this page does not see. Read the purchase agreement and the actual tax bill before relying on the number.
How to use
- Find the tax period printed on the bill. Use the full period, not just the installment that happens to be due.
- Enter the annual tax for that full period. If the bill shows two installments, add them together.
- Enter the first and last day of the tax period.
- Enter the closing date. Confirm whether the contract gives the closing day to the buyer or the seller.
- Choose arrears or advance based on whether the seller has already paid the bill.
- Read the settlement direction and both shares, then compare them with the closing disclosure before signing.
Formula
- annual tax
- The full bill for the tax period, not a single installment.
- total days
- Inclusive calendar days from the period start through the period end.
- closing date
- The day the buyer takes ownership; it is counted as a buyer day.
- seller days
- Days from the period start up to the day before closing.
- buyer days
- Closing day through the period end.
- settlement
- The party who credits the other at closing and the amount.
The daily rate is a simple average, so every day in the period carries the same tax. That is the common 365-day method, and it also works for a 366-day leap year because the denominator changes with the dates you enter. The formula does not compound, discount, or adjust for the time value of money. If the contract says the seller owns the closing day, move the closing date forward by one day in the calculator and compare the result. If the contract uses a 360-day year, divide by 360 instead and expect a different answer. Installment bills may need a separate proration for each installment if the due dates fall on different sides of closing.
Worked example
Example: $4,380 bill, June 15 closing, paid in arrears
A home sells on June 15, 2026. The property tax period is January 1 to December 31, 2026, the annual bill is $4,380, and the tax is paid in arrears.
- Total days = January 1 through December 31, 2026 = 365 days.
- Daily rate = 4,380 / 365 = $12.00 per day.
- Seller days = January 1 through June 14 = 165 days.
- Buyer days = June 15 through December 31 = 200 days.
- Seller share = 165 x 12 = $1,980.00.
- Buyer share = 200 x 12 = $2,400.00.
- Because the bill is paid in arrears, the seller credits the buyer $1,980.00 at closing.
Reference table
| Closing | Seller days | Buyer days | Seller share | Buyer share |
|---|---|---|---|---|
| February 1 | 31 | 334 | $372.00 | $4,008.00 |
| April 1 | 90 | 275 | $1,080.00 | $3,300.00 |
| June 15 | 165 | 200 | $1,980.00 | $2,400.00 |
| September 1 | 243 | 122 | $2,916.00 | $1,464.00 |
| November 1 | 304 | 61 | $3,648.00 | $732.00 |
| December 31 | 364 | 1 | $4,368.00 | $12.00 |
Limits
- Assumes the closing day belongs to the buyer. Some contracts give it to the seller.
- Uses a simple daily average. It does not handle a 360-day banker's year unless you adjust the period.
- Does not include supplemental taxes, special assessments, municipal utility charges, or escrow impounds.
- Not legal or tax advice. The purchase contract and the closing disclosure control the actual adjustment.
Common mistakes
- Entering one installment instead of the full annual bill.
- Using the closing month or a 30-day month instead of the actual calendar days.
- Counting the closing day for both parties, or for neither party.
- Choosing arrears when the seller already paid the bill, which reverses the credit.
- Ignoring a fiscal-year tax period that starts July 1 rather than January 1.
- Forgetting that a leap year adds a day to the denominator.
Try it yourself
Quick checks. Answers sit tucked under each question.
A $5,475 bill covers calendar year 2025. Closing is August 1 and taxes are paid in arrears. What is the seller credit?
Daily rate = 5,475 / 365 = $15.00. Seller days = 212. Buyer days = 153. Seller credit = 212 x 15 = $3,180.00.
A $7,300 bill covers 2026. Closing is October 1 and the seller already paid in advance. What does the buyer owe?
Daily rate = $20.00. Seller days = 273. Buyer days = 92. Buyer credits the seller 92 x 20 = $1,840.00.
A $4,392 bill covers leap year 2024. Closing is July 1 and taxes are paid in arrears. What are the two shares?
Total days = 366. Daily rate = $12.00. Seller days = 182. Buyer days = 184. Seller share = $2,184.00. Buyer share = $2,208.00.
Questions
Who pays property taxes on the day of closing?
It depends on the contract. This calculator gives the closing day to the buyer. Many purchase agreements do the same, but you should confirm the exact language.
What does paid in arrears mean?
The bill covers a period that has already passed, or installments are billed during the period. The seller has not yet paid for the days before closing, so the seller credits the buyer.
What if the seller already paid the tax bill?
Choose advance. The seller has covered the full period, so the buyer owes the seller for the days after closing.
Should I use 365 or 366 days?
Use the actual number of days in the tax period. A calendar year has 365 days, or 366 in a leap year. A fiscal year may have 365 or 366 as well.
Does this include supplemental taxes?
No. Supplemental assessments and special district charges are separate lines. Add them only if the contract says they are prorated the same way.
Why is the credit different from my closing disclosure?
The contract may use a different day count, a fiscal year, a 360-day year, or a different closing-day rule. Compare the period, the annual amount, and the day convention line by line.
Sources
- Napa County, California: Proration of Property Taxes
- Lucas County, Ohio Treasurer: Guidance for Title Companies, Real Estate Tax Proration