Understanding Property Tax in Montana

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 1 to the closing date. The buyer is responsible for taxes from the closing date through December 31. 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 become due.

Example:

Closing date is March 15

Annual tax bill is $1,200

(January 1 through December 31)

$1,200 divided by 365 days = $3.2877 per day

January 1 through March 15 = 74 days

74 x $3.2877 = $243.29 charged to the seller and credited to the buyer

The first half taxes become delinquent on December 1.

The second half taxes become delinquent June 1 of the following year.

  • The tax proration for the current year may be an estimate based on the prior year tax amount.
  • The seller pays the property taxes for each day they own the home.
  • The buyer pays the property taxes for each day they own the home.
  • Your escrow officer will make sure this is properly calculated.

This information is specific for Montana only. Property tax due dates vary from state to state.

Take a look at our Client Resource Guide for even more information such as:

  • Menu of Services
  • Farm Reporting and Prospecting Lists
  • Title Insurance is Not “Just Another Fee”
  • What is Escrow?
  • The Life of Your Title and Escrow Transaction
  • TRID Grid
  • Tips for a Smooth Transaction
  • Settlement Guide (Who pays for what?)
  • Understanding Tax Prorations for Idaho
  • Understanding Tax Prorations for Washington
  • Locations and Footprint

Need help closing your next transaction? Connect with your local Alliance Title representative!

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