If real estate taxes due are $1,200 for six months and a property closes on November 1, what is the proration for the buyer?

Understanding the proration of real estate taxes during a property sale is essential for accurately reflecting financial responsibilities between the buyer and the seller. In this scenario, the total real estate taxes due are $1,200 for a six-month period, which implies that the monthly tax amount is $200 ($1,200 divided by 6 months).

Since the property closes on November 1, we need to figure out how many months the taxes apply to each party. For a closing date of November 1, the seller is responsible for the taxes up until the day of closing, meaning the seller is accountable for the taxes for the month of October, while the buyer will bear the costs starting on November 1.

From the start of October until the closing date on November 1, the seller is responsible for one full month of taxes, equivalent to $200. Therefore, the seller owes $800 (four months of tax) for the months of June, July, August, and September, and the $200 for October totals $1,000.

The buyer pays for November, which amounts to $200. Therefore, the buyer receives a credit of $800 for the remaining months the seller is responsible for, and the seller will have a debit