County and/or City Property Taxes

Property taxes function differently because they are typically paid in "arrears," meaning they are paid at the end of the year for the year that has just passed. When a closing happens during the year (for example, in June), the tax bill for that year has not yet been issued and won't be due until November or December. However, the seller has owned the property for the first several months of the year and is financially responsible for that period. Since the buyer will eventually receive the full bill at the end of the year, the seller must credit the buyer for the taxes accrued from January 1st up to the day of closing. This ensures the buyer has the funds to pay the seller's portion when the bill finally arrives.