Skip to content
ClosingCodeClosingCode
ENES

Property tax proration calculator

Enter the annual tax and the closing date. You get each side's share of the tax year and the credit on the settlement statement – by actual days.

The closing day counts for
This year's tax bill

How the proration works

  1. 1. Split the year

    Each side pays for the days it owns the home in the tax year – annual tax ÷ days in the year × days owned.

  2. 2. The closing day

    Federal income tax treats the sale date as the buyer's (26 U.S.C. 164(d)); a contract that prorates "through the Closing Date" – like the Texas resale contract – gives it to the seller.

  3. 3. Unpaid or paid

    Not yet paid (arrears): the seller credits the buyer, who pays the bill. Already paid: the buyer reimburses the seller for the rest of the year.

Before you rely on the number

  • Use the current year's bill – or last year's when this year's isn't out, and adjust later if the contract says so.
  • Check the tax year: most counties use the calendar year; some run on a fiscal year.
  • Exemptions such as a homestead may change the amount after the sale.

Questions about tax proration

Who pays property tax for the day of closing?

It depends on the contract. Federal income tax treats the sale date as the buyer's; contracts that prorate "through the Closing Date", like TREC 20-19 paragraph 13, give that day to the seller.

What does it mean when property taxes are paid in arrears?

The bill for the year comes after the year (or late in it), so at closing the seller has not paid their share yet – the seller credits the buyer, who pays the whole bill later.

What if the actual tax differs from the estimate?

Many contracts – Texas paragraph 13 for example – say the parties adjust the proration when the current year's tax statements are available.

Related guides and tools

ClosingCode's checklist has a step to review the Closing Disclosure or settlement statement three days before closing – the moment to check the tax proration.

Start free trial

Sources: 26 U.S.C. 164(d) and IRS Publication 530; TREC One to Four Family Residential Contract (Resale) 20-19, paragraph 13 (read October 2026).

An estimate, not tax or legal advice. ClosingCode is software; it is not a title company or tax preparer. This guide is not a substitute for the advice or services of an attorney.