At a real estate closing in Montana, how are property taxes typically prorated between the buyer and seller?
Correct Answer
B) The seller is responsible for taxes through the closing date, and the buyer is responsible for taxes after the closing date
At closing in Montana, property taxes are prorated based on the number of days each party owns the property during the tax year. Because Montana property taxes are paid in arrears, the seller owes taxes for the portion of the year they owned the property up through the closing date. This amount is typically credited to the buyer at closing, who then pays the full tax bill when it comes due. The proration ensures each party pays only their fair share based on their period of ownership.
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Related Topics & Key Terms
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Related Concepts
Contract termination occurs when a contract is ended or discharged, releasing both parties from their obligations. A contract can be terminated through performance, mutual agreement, operation of law, or breach.
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
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