05/04/2022 0 Comments
Property Tax Assessments – Who Pays?
We recently were contacted by an agent advising us of confusion about new properties sold without tax assessments. The example used was a new property sold within a year of being purchased, where there is no assessment and therefore no property taxes have been paid.
The question was What should the realtors and Sellers and new Buyers know about who pays and how is the money collected?”
The answer is the Seller is responsible for the taxes up to the closing date, and this will have to be adjusted after closing when the bill is received. The taxes run with the land and the new owner, the Buyer, will receive the tax bill and will pass it on to their lawyer. The lawyer should have as part of the closing, received an undertaking from the Seller’s lawyer, to hold back sufficient funds from the sale proceeds to cover the Seller’s share. The lawyer should have worked out an estimate of what those taxes are. The lawyers will then do the tax adjustment, pay the Seller’s share to the Buyer so they can pay the City, and the balance left over will be refunded to the Seller.
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