When you buy a house, you should receive a credit from the seller for the property taxes due up to the date of the closing. This occurs because property taxes accrue during a year but are not paid until the next year. Because of the way this works, the person selling the house will be responsible for paying all the property taxes due on the date you close on the house, and there are several things to expect from this.
You will see the property taxes listed as a credit on your settlement statement
A few days before closing on the house you are buying, you should receive a statement from your lender that is called a settlement statement. This statement lists all the expenses and credits of the loan you are getting for the house you are buying, and one of the things you should see on this document is a credit for property taxes.
This credit is there to show you that the seller is paying you for the property taxes he or she owed up until this date. This credit does not mean that the seller is paying the county treasurer for the taxes.
You will be responsible for paying the taxes
Because this credit doesn't represent a payment to the county treasurer, you will be responsible for paying the property taxes on the house you are buying when they are due. In many cases, the first payment for property taxes is due on May 10. If you close on your house in April, you will have a payment due the next month for property taxes. While these taxes are for last year, you are responsible for paying them because the seller compensated you for them when you closed on the house.
Your lender will probably set up an escrow account for this
In most situations, lenders set up escrow accounts to pay property taxes and home insurance. If your lender did this, you will not have to pay the property taxes out of your pocket. You will have money in your escrow account for this, and your lender will make sure the taxes are paid in full by the dates in which they are due.
If you want to make sure you get credited for the property taxes when buying a house, make sure they are listed on your settlement statements. If you have questions about this, talk to a realty agent today.Share
20 April 2018
I have always been someone who is passionate about making the world around me more beautiful, which is probably why I was drawn to real estate initially. I really wanted to create a place where me and my family could spend a lot of time together in a peaceful, relaxing place, so I started looking for places in my area that were fit for the job. Within a few months, I was able to find an incredible property that was within my price range, so I purchased it as soon as possible. This blog is all about choosing beautiful real estate.