Through the process of a closing, your escrow officer will prorate property taxes to the date of the closing. The seller is responsible for the property taxes from January 1st to the closing date. The buyer is responsible for the taxes from the closing date through December 31st. If the buyer is including taxes in their mortgage payment, the lender may collect reserves to pay the taxes on the buyer’s behalf when they come due.
In the State of Washington, the property tax year is January 1st through December 31st. Property tax installments become due on April 30th and October 31st each year.
Here is an example of how taxes would be prorated for a closing date of March 15th:
Annual tax bill is $1,200 (January 1st through December 31st)
$1,200 divided by 365 days = $3.2877 per day
January 1st through March 15th = 74 days
74 x $3.2877 = $243.29, which is charged to the seller
As can be seen from the above example, the seller pays the property taxes for each day they own the home during the tax year. The buyer will then pay the property taxes for each day they own the home for the remainder of the tax year. Your escrow officer will make sure these tax prorations are properly calculated.