A buyer is purchasing a home in Loudoun County, Virginia in October. At closing, the real estate agent explains that property taxes will be prorated between the buyer and seller. In Virginia, how are property taxes typically prorated at closing when the exact tax bill for the current year has not yet been issued?
Correct Answer
B) Taxes are prorated using the prior year's tax bill as an estimate, with a closing adjustment if the actual bill differs
In Virginia real estate closings, when the current year's property tax bill has not yet been issued, it is standard practice to prorate taxes based on the prior year's tax bill as an estimate of the current year's liability. The parties agree at closing to a proration, and if the actual bill differs from the estimate, a post-closing adjustment may be made per the contract terms. This is consistent with Virginia closing customs and the Virginia Residential Contract of Purchase provisions.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A transfer tax is a tax imposed on the transfer of ownership of real estate.
Reconciliation is the final step in the appraisal process where the appraiser analyzes the value indications from all applicable approaches and arrives at a single final opinion of value. It is not a simple average of the three values.
The comparable sales approach estimates a property's value by comparing it to similar properties that have recently sold in the same market area. It is the most widely used and reliable approach for appraising residential properties.
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