Wednesday, July 26, 2017 10:28

Lawyer-Video6

Q. Why Do Homebuyers have to pay Property Taxes at closing sometimes?

A. To clarify, you will never have to pay property taxes for times when you do not own title to the property. What you see sometimes on the statement of adjustments that your lawyer will prepare –  let’s say that you are purchasing your property on february 1st, the people you are buying your property from have paid their taxes from January 1st to march 1st. The city does does not refund the taxes the previous owners have already paid, so they have prepaid. What you will get on your statement of adjustments is since the vendor has paid up to march 1st the vendor will get credit from February 1st until march 1st and they get credited that amount because that property tax is really owed by you as the new purchaser so that gets added to the purchase price. The same is true if you bought it and taxes are owing, you will get credited as a purchaser for the purchase price so that means you will pay less to reflect that you will have to pay some municipal taxes for time when you did not own the home. Really it all comes out in the wash, it just looks like either you are paying or you are receiving credit for at the time of the purchase.

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