Why do Illinois residential closing statements frequently include a property tax proration credit for a period during which no tax bill has yet been paid?
Correct Answer
B) Illinois property taxes are levied and paid in arrears, so at closing the seller typically owes taxes for the current ownership period that will not be billed until after closing.
Illinois property taxes are assessed and paid in arrears — taxes for a given year are billed and paid the following year. At closing, the current year's bill has not yet been issued or paid, but the seller has accrued a tax obligation for the portion of the year they owned the property. To account for this, the seller credits the buyer at closing for that accrued amount, and the buyer will pay the full bill when it becomes due. This arrears-based system is the foundation of Illinois tax proration practice.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Intestate succession is the legal process by which a deceased person's property is distributed according to state law when they die without a valid will. State statutes determine the order of inheritance.
Marketable title is title that is free from reasonable doubt as to who the owner is and free from liens, encumbrances, or defects that would cause a reasonable buyer to hesitate before purchasing. It is also known as merchantable title.
Probate is the legal process by which a deceased person's will is validated by the court and their estate is administered, including the transfer of real property to the named beneficiaries or heirs.
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- → In Oklahoma, real estate documents such as deeds are recorded with which office?
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