Home › Calculators › Prorated Property Tax Calculator

Prorated Property Tax Calculator

Split a year's property tax between buyer and seller at closing. Choose whether taxes are paid in arrears or in advance, who owns the closing day and the day-count method, and see each side's share and the credit that goes on the settlement statement.

Last updated: October 24, 2026

Currency

Tax bill

Yearly property tax

Latest bill, or an estimate

Prorate on

% of bill

Some contracts use 105%–110% of the last bill

Tax year starts

January for calendar-year taxes, July for many fiscal years

How are taxes paid?

In arrears (not yet paid)In advance (seller prepaid)Partly paid

Amount the seller already paid for this period

For example the first installment

Unpaid tax from an earlier period

Seller owes all of it (common where taxes run a year behind)

Closing

Closing date

Closing day is charged to

BuyerSeller

Day count

Enter your values to see the result.

How to use the Prorated Property Tax Calculator

Enter the yearly property tax and, if your contract says so, a percentage of the last bill (such as 105%).
Pick the month the tax year starts and whether taxes are paid in arrears, in advance or partly paid.
Enter the closing date and choose who is charged for the closing day.
Choose the day-count method used in your area (actual days is most common).
Press Calculate proration to see the seller and buyer shares and the credit at closing.

Property tax proration formula

Daily rate = yearly tax ÷ days in the tax year (365, 366, or 360 under the banker's method).
Seller share = daily rate × days from the start of the tax year to closing.
Buyer share = yearly tax − seller share.
Credit = seller share − tax the seller has already paid for this period. Positive: the seller credits the buyer. Negative: the buyer credits the seller.

Example: $6,000 yearly tax on a calendar year, paid in arrears, closing on June 15, 2026 with the buyer owning closing day. The seller owned the home January 1 to June 14, which is 165 days. The daily rate is $6,000 ÷ 365 = $16.44, so the seller's share is $2,712.33 and the seller credits the buyer that amount. If the seller had prepaid the full $6,000, the buyer would instead credit the seller $3,287.67 for the remaining 200 days.

Arrears vs advance at a glance

Situation	Who has paid?	Credit at closing
Paid in arrears	Nobody yet for the current year	Seller credits buyer for the seller's days
Paid in advance	Seller paid the full period	Buyer credits seller for the buyer's days
Partly paid (first installment)	Seller paid part of the year	Difference between seller's share and amount paid
Taxes a year behind	Last year's bill still unpaid	Seller credits all of last year plus this year's share

Tips

Check the purchase contract: it states the proration date, who owns the closing day and whether to use an estimate.
Prorations are usually based on the most recent bill. If a reassessment is coming, the buyer may pay more than the prorated amount suggests.
If your lender collects escrow, the buyer's tax credit typically goes toward the initial escrow deposit.
Use the table to see how the credit changes if closing moves to another month.

Frequently asked questions

How do you prorate property taxes at closing?

Divide the yearly tax by the number of days in the tax year to get a daily rate, then multiply by the days each party owns the home during that year. The seller is responsible from the start of the tax year until closing, and the buyer from closing to the end of the year.

What does paid in arrears mean?

Taxes paid in arrears are billed after the period they cover, so on closing day the current year's tax has not been paid yet. The seller gives the buyer a credit for the days the seller owned the home, and the buyer pays the full bill when it arrives.

What if the seller already paid the taxes in advance?

If the seller prepaid the whole tax period, the buyer reimburses the seller for the days after closing. On the settlement statement this appears as a credit to the seller and a charge to the buyer.

Who pays property tax on the day of closing?

In most US transactions the buyer owns the home on the closing day and pays for that day, but some contracts and local customs assign it to the seller. The calculator lets you choose either.

Why would taxes be prorated at 105% or 110% of the last bill?

When the current year's bill has not been issued, some contracts (common in parts of the Midwest) prorate on more than the last known bill to account for expected increases. Others re-prorate after the actual bill arrives.

What is the 360-day proration method?

The banker's method treats every month as 30 days and the year as 360 days. It gives slightly different results from the actual-day method, which counts the real calendar days (365 or 366).

Are all the tools on FreeToolCabin tested for quality and accuracy?

Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.

Related tools

See all 118 Tax & Paycheck Calculators →