The direct answer
Property tax proration allocates an entered annual tax amount across seller and buyer responsibility using a selected day-count basis and closing-day convention. It is a transaction allocation estimate, not a calculation of the assessed tax or a universal rule for every closing.
Establish the annual amount and billing context
Use a relevant tax estimate or bill and identify whether the actual closing uses paid taxes, taxes in arrears or another adjustment. The tool does not retrieve assessed value, millage or exemption data. The allocation of a charge between parties can differ from the timing of the tax authority’s invoice, so a mathematical share alone does not establish who must pay the current bill.
To apply the approach to an editable scenario, use the Property Tax Proration Calculator. For the neighboring question, explore Home Sale / Seller Net Proceeds Calculator.
Count responsibility with the chosen convention
The model takes the closing day as an ordinal day of the selected year basis. Day-before-closing mode assigns closing day minus one to the seller; closing-day mode includes that day. Daily tax equals the annual tax divided by the basis. The remaining annual amount belongs to the buyer allocation in the model. A closing day beyond the selected basis is invalid.
Reconcile with the closing documents
A real settlement can use estimates, local conventions or later adjustments. Compare the model’s day-count and responsibility assumptions with the controlling transaction documents. Keep daily tax unrounded internally and round the displayed allocations at the end. The example does not establish the legal allocation for a particular property or agreement.
Worked example
At $6,000 annual tax, a 365-day basis and closing on day 120, the day-before convention gives 119 seller days. Seller share is $1,956.16 and buyer share is $4,043.84. Including closing day raises seller share to $1,972.60, with the buyer taking the remainder.
Open Property Tax Proration Calculator and test your assumptions →
Common mistakes and limitations
Do not confuse closing day of the year with day of the month. Rounding the daily rate first can alter the final allocation.
Actual proration conventions and tax due dates vary by jurisdiction and contract. Calculator does not determine legal responsibility.
Frequently asked questions
Does the tool calculate the property tax bill?
No. It allocates the annual tax amount supplied by the user.
Who is responsible for closing day?
The selected convention determines the modeled allocation. Confirm the actual treatment in the applicable closing documents.
Sources and further reading
The article’s examples are illustrative arithmetic. The references below provide context for operating, valuation or transaction concepts; they do not endorse the assumptions or the calculator.
- CFPB — Regulation Z §1026.38 — Closing DisclosureClosing-disclosure treatment of prorated taxes/assessments and transaction adjustments.
- IRS — Publication 523 (2025), Selling Your HomeSelling expenses, commissions, amount realized and real-estate tax day allocation context.
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