When should property taxes typically be prorated on the closing statement?

Prorating property taxes on the closing statement is typically based on the day of closing belonging to the buyer. This practice is established to ensure that the buyer pays for property taxes that accrue after they take ownership of the property. In real estate transactions, property taxes are usually assessed based on the calendar year or fiscal year, and the seller is responsible for taxes up until the day of closing.

On closing day, all property taxes that are due up to that date are calculated and applied to the seller's account. The buyer then assumes responsibility for any taxes that accrue from that day forward. This process ensures that both parties pay their fair share of taxes based on the time they owned the property.

Other options may refer to different aspects of property taxes or closing processes but do not align with the standard practice of prorating taxes in this context. Understanding this concept is crucial for real estate professionals, as it affects the financial obligations of both buyers and sellers during a property transaction.