Tax prorations are a part of every real estate transaction, but what does it mean and how is the math calculated? It’s really quite simple, and Jennifer Goens is here to explain.

Tax prorations are handled at every closing. The purpose is to split the share of the upcoming taxes between the buyer and the seller. This split is based off of each party’s length of ownership of the property.

Simply put, a seller pays “more” in taxes for the property in November rather than selling in March.

Once the taxes are split, the total amount goes to the buyer who is responsible for paying the tax bill in it’s entirety once the bills are issued at the end of the year.

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