How is the tax proration amount split if the closing date falls within the year?

When a closing date occurs within the year, the tax proration amount is divided between the buyer and the seller. This practice is based on the principle that property taxes are typically assessed on an annual basis, but the accrual of those taxes occurs throughout the year.

At closing, the seller is responsible for any property taxes that have accrued up to the date of sale, while the buyer assumes responsibility for the period starting from the closing date. Hence, the taxes for the year are prorated based on the number of days each party occupies the property.

This method ensures that both parties only pay for the portion of the year in which they owned the property. Therefore, it's essential to calculate the proration accurately to reflect each party's fair share and facilitate an equitable transaction. In cases where the closing occurs mid-year, a prorated amount will be calculated and divided accordingly. This system protects the interests of both the buyer and the seller, ensuring fair distribution of tax liabilities.