At closing, how are property taxes typically prorated between buyer and seller?
Correct Answer
B) The seller is responsible for taxes through the closing date, and the buyer is responsible for the remainder
Property taxes are typically prorated at closing so that the seller pays for the portion of the tax year they owned the property, and the buyer is responsible for the remainder. Note that not all Alaska jurisdictions levy property taxes — some boroughs and unorganized areas have no property tax — so proration may not apply in every Alaska transaction.
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Related Topics & Key Terms
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Related Concepts
A purchase agreement is a legally binding contract between a buyer and seller that outlines the terms and conditions for the sale of real property. It is also commonly called a sales contract, purchase and sale agreement, or earnest money agreement.
Specific performance is a court-ordered remedy that compels the breaching party to fulfill their obligations under the contract rather than simply paying monetary damages. It is an equitable remedy used when monetary damages would be inadequate.
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
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- → A Rhode Island licensee encounters a listing contract is drafted. What should the licensee remember?
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- → Which Rhode Island rule applies when a listing agreement lists property with a multiple listing service?
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- → A Hawaii licensee is reviewing the commission asks to inspect escrow and trust records. What is the best answer?
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