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A Little Note from Me to You!  - Property Taxes are paid in Arrears

11 June 2014 at 17:35

Sometimes it can be confusing for Buyers and Sellers when they get to the closing table and have to pay taxes! 

Here is an explaination I found that explains this clearly - Thought it may be useful for you.

        Definition

    • Paid in arrears typically applies to paying for something that has already happened, as opposed to prepaying. With property taxes, paid in arrears would apply to paying taxes for a period that has already past. For example, if your county tax assessor sends you a property tax bill for one year, and the policy is to bill in arrears, the bill is actually for last year's taxes, as opposed to the current year.

Confusion

    • While the term paid in arrears might normally apply when discussing a late or past due payment, it does not typically refer to a past due payment when applied to property tax. If the tax assessor bills the property taxes in arrears, the taxes become past due when the property owner fails to meet the payment date set by the tax assessor, not the dates the tax bill covers.

Transferring Ownership

    • When you sell your house and it goes through a title search during the escrow process, one of the items the settlement agent addresses is property tax. If the property owner conveying title pays taxes in arrears, he may have property taxes to pay before conveying title to the new owner. This is typically done through the purchase proceeds. For taxes not paid in arrears, there may be a refund coming to the seller.

    • Read more:  http://www.ehow.com/info_8074117_paid-mean-related-property-taxes.html#ixzz34N9xiMPt

      Other resources:
http://www.ehow.com/how_6494725_pay-property-taxes-arrears.html

 

 

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