A home in Virginia Beach, Virginia sold on April 30. The annual property tax is $3,600 (paid in arrears, due December 5 for the full calendar year). Using a 365-day year, how much will the seller owe in property tax proration at closing? (Assume the day of closing belongs to the buyer.)
Correct Answer
B) $1,174
Because the day of closing belongs to the buyer, the seller is responsible for January 1 through April 29: 31 + 28 + 31 + 29 = 119 days. Using the stated 365-day year, the daily tax rate is $3,600 / 365 = $9.8630. The seller's proration is 119 × $9.8630 = $1,173.70, which rounds to $1,174.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Various programs and exemptions exist to reduce the property tax burden for specific groups, such as seniors, homesteaders, or veterans.
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.
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