When does a seller typically receive the credit for property taxes already paid during a closing?

In a real estate transaction, it is standard practice for the seller to receive credit for property taxes that have already been paid prior to the closing date when the buyer is responsible for the property taxes for the day of closing. This means that the seller has already incurred the cost of the property taxes up until that closing date, and the buyer, taking possession of the property, is also assuming the responsibility for any taxes due from that point forward.

By ensuring that the buyer pays for the day of closing, the financial responsibility for that day’s property taxes is appropriately allocated, effectively allowing the seller to recoup some of their costs. This arrangement helps to align the benefits and responsibilities associated with property ownership and taxes between the buyer and the seller as of the closing date.

In contrast, selling before the next payment is due doesn’t guarantee that the seller would receive any particular credit. Also, price reduction agreements and transactions without a mortgage don’t inherently dictate how property tax responsibilities are shared at closing.