How is prorated property tax calculated at closing?

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Prorating property taxes at closing is about matching tax liability to the time each party actually owned the property during the tax period. The calculation uses a daily tax rate derived from the yearly amount: take the annual tax, divide by 365 (366 in a leap year) to get the daily rate, then multiply by the number of days the seller owned the property in that tax period. That yields the seller’s share. The buyer’s share is the remainder of the year’s tax. If there are interim adjustments—such as taxes already paid by the seller or taxes prepaid at closing—those are added to or subtracted from the prorated amount. This approach fairly assigns tax responsibility to the person who benefited from the property during each day of the tax period. Using an annual or monthly figure without accounting for exact days wouldn’t reflect who actually owned the home, and prorations are standard practice in closing.