How to Use This Property Tax Proration Calculator (50 States)
This tool estimates how much property tax the seller and buyer each owe for the portion of the tax year they own the property.
It’s designed to match how proration is commonly handled at closing, but property tax rates and billing schedules are set locally (county/city/school districts). Your contract and local customs can override defaults.
Before You Start: What You Need
Have these ready:
- Closing date (the date the property changes hands)
- Annual property tax amount from the most recent tax bill
- Use the total annual amount for the period you’re prorating
- If you only have a half-year bill, enter the total annual amount (or multiply by 2 if appropriate)
- State (required)
- County (optional, for your reference and future advanced lookup)
Step-by-Step Instructions
1) Select the state
Pick the state where the property is located.
Why it matters: Some states follow calendar-year taxes, others follow fiscal-year taxes, and many vary by county.
2) (Optional) Enter the county
This doesn’t change the math right now, but it helps you document the jurisdiction and makes your results easier to reference.
3) Enter the closing date
This is the date proration is calculated through.
Example: If closing is June 15, the seller typically owes taxes for their ownership days up to (and sometimes including) that date.
4) Choose the “Tax Year Mode”
You have three options:
- Use State Default
Uses the stored state convention when available.
If the state is marked as “varies,” the calculator will ask you to enter the tax year start/end dates. - Calendar Year (Jan 1 – Dec 31)
Use this if your property taxes are treated as calendar-year for your area or contract. - Custom Tax Year Start/End
Use this if you know the exact tax year for your county or tax bill period.
Example: A fiscal year like July 1 – June 30.
Tip: If you’re unsure, look at your tax bill. It often shows the exact coverage period.
5) Enter the annual property tax amount (required)
Enter the annual total from your most recent property tax bill.
Important:
- This tool prorates an annual amount across the tax year.
- If your taxes changed recently, the proration is only as accurate as the number you enter.
6) Choose “Taxes Paid Position at Closing”
This is the most important setting after the annual tax amount.
- Taxes paid in arrears (common)
Means taxes are paid after the time period has passed.
At closing, the seller typically gives the buyer a credit for the seller’s share, because the buyer will pay the bill later. - Taxes paid in advance
Means taxes are paid before the time period occurs.
At closing, the buyer typically reimburses the seller for the buyer’s share, because the seller already paid the upcoming period.
If you’re not sure:
- Check the settlement statement draft
- Ask the closing agent or title company
- Review the purchase contract proration section
7) Choose the “Day Count Method”
- Actual days (365/366) (recommended default)
Uses the real number of days in the tax year, including leap years. - 360-day banking year
Some contracts/industries use 30-day months for simplicity. Use only if your closing instructions specify it.
8) Decide who owns the day of closing
This is a common “small difference” that changes the result slightly.
- Buyer owns closing day (default)
Seller owes through the day before closing. - Seller owns closing day
Seller owes through the closing date.
Your contract or local custom determines the correct setting.
9) Click “Calculate Proration”
You’ll get:
- The tax year period used
- Total days in the tax period
- Seller days and buyer days
- Daily tax rate
- Seller prorated amount and buyer prorated amount
- A settlement-style line item showing who credits whom
How to Read the Result (What It Means on the Settlement Statement)
You’ll see one of these:
“Property tax proration credit (Seller → Buyer)”
This usually appears when:
- Taxes are paid in arrears
- Seller owes their portion to buyer at closing
Meaning: Seller gives buyer a credit so buyer isn’t stuck paying the full tax bill later.
“Property tax proration reimbursement (Buyer → Seller)”
This usually appears when:
- Taxes are paid in advance
- Seller already paid for time the buyer will own the property
Meaning: Buyer reimburses seller for the buyer’s portion.
Common Mistakes to Avoid
- Using the wrong tax year period
- If your local tax year is fiscal, choosing calendar-year will skew the numbers.
- Entering the wrong annual tax amount
- Use the correct “total due” for the period you’re prorating.
- Wrong “paid in arrears vs advance”
- This flips who pays whom.
- Not matching the contract
- Your contract can specify:
- the tax year basis
- day-of-closing ownership
- whether to use “last bill” vs “estimated” vs “current assessment”
- Your contract can specify:
About the “Sources & State Rules” Button
This panel shows:
- The state’s stored tax-year conventions (when available)
- Any installment due dates included
- Whether the state is marked as “jurisdiction variance likely”
- The source links used for that state’s rule defaults
- A “last verified” date for transparency
If a state is marked as needing manual review, treat the state defaults as a starting point and confirm with your local assessor or tax bill.
When You Should Use “Custom Tax Year Start/End”
Use custom dates if:
- Your tax bill clearly shows a coverage period
- Your county uses a different tax year than the state default
- Your closing instructions specify a specific period
- You’re prorating a special case (new construction, reassessment timing, partial-year bills)
Final Note (Practical Disclaimer)
This calculator is for estimation and transparency. Final proration on a real transaction should match:
- the purchase contract
- the title/closing agent’s settlement method
- the local taxing authority’s billing period and rules
If you want “highest accuracy,” use the annual tax amount from the most recent bill, and set the tax year period to match the bill exactly.