If you buy a house toward the end of the year, are you responsible.....?

Question

for the all of property taxes for that year, even if you've owned it for only the last two or three months of that year?

yes, I even had title ins. as the mortgage co. requires. But I bought from an elderly couple with tax rates much lower than mine and now the tax assessor/collector wants taxes paid at my rate for the whole year, not just the 3 months I owned the house.

Answer 1

Get two documents out of your file of closing papers: the contract and the HUD-1. Read the contract first and it should discuss how taxes were to be handled. Then look at the first page of the HUD-1 (settlement statement) and see how it was actually done. You might have some other paper with your closing papers which discusses tax prorations or the lack thereof. These matters are handled differently depending on when the property closes. Normally when the property closes at the end of they year, the taxes for that year are paid at closing. You might find such a payment on the second page of the HUD-1 at the bottom, probably on the seller's side.

In Texas, taxes are owed by the person who owns the property on January 1 of that year. But if you don't pay the taxes, the government will take the property for unpaid taxes, so it is in your interest to make sure they actually are paid.

Answer 2

You may think that you are actually paying for the whole year of RE Tax. However, if the taxes were not due for payment when you purchased your property, RE Tax has been pro-rated at the settlement. Which means, if you were billed for year 2006 (Jan ~ Dec.), and you've settled your house on Oct. 06, Jan ~ the day of the settlement was pro-rated. You were credited from seller. Refer to your settlement statement (Hud-).

Answer 3

I got your answer. If it is a new construction, you ARE responsible for the whole years taxes. I got screwed that way. If it is not new construction, than you are responsible only if previous owners were delinquent with their taxes.

Trust me, my wife is a TAX ATTORNEY, and I am a Mortgage Banker, check any new construction contract, in the small print it says that the buyer is responsible for the
entire year, not negotiable.

You guys keep saying pro-rate. Yes in an ideal situation you would be prorated (except in a new construing), but that only happens in 50% of loans. the other 50% are additional taxes for taxes owed by previous owner..

IMPORTANT QUESTION----- Is the tax appraisal close to the actual appraisal?

Answer 4

It depends on when the taxes are due. When I bought my house the HUD-1 stated the amount of months we owed for taxes - it was prorated against the seller's amount they would owe. So basically the price of the house was reduced by the taxes owed by the seller. So essentially he paid the taxes he owed by taking that amount less on the house.
Make sense?

Answer 5

Common practice is to prorate them between you and the previous owner. That should be clearly stated in the contract if an R/E agent was involved. In any event any outstanding (unpaid) debt would eventually go against the property (you).

Answer 6

You could be paying supplemental taxes because youdon not have to pay for the year you werent there. Those taxes are the previous owners responsiblilty. Are you sure they arent asking you for the 1st half of 2007?

Answer 7

When you buy a house the property taxes are prorated with the former owner.

Answer 8

not unless there was something written in your contract. but at closing you usually pay money into and escrow for tax and insurance purposes. the mtg company usually divides your taxes, insurance and possibly pmi by 12 to come up with what should be in escrow for the following year.

Answer 9

not unless u agreed to pay back taxes
mortgage co ususally sends the tax $ from your payments

Answer 10

The taxes are prorated for the actual amount of time you owned it.