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You sold, but are you still liable for property taxes?

Sold Sign

This is why sellers receive a tax bill.

If you sold your home this year, you will still receive a bill. 

The tax commissioner is responsible for billing both the new and Jan. 1 owners, which often surprises sellers.

Most of the time tax liability transfers seamlessly to buyers because taxes are paid on time. On the rare occasion they're not, sellers need to know the tax laws and how to protect themselves.

Taxes accrue in full on Jan. 1, and the Jan. 1 owner is responsible for the entire amount. If the taxes become delinquent, the Jan. 1 owner is named on the tax lien - unless, within 90 days of the payment due date, three things are in place:

  1. Acceptable proof that the purchaser assumed liability is submitted to the tax commissioner, and
  2. The deed is in the new owner's name, and
  3. The deed is properly recorded.

When these are true, liens for delinquent taxes will be filed in the name of the owner as of the tax due date.


Samples of Unacceptable and Acceptable Language

NOT Acceptable

“The buyer and seller agree to adjust for any additional or revised tax bills...”


“Unpaid taxes not accounted for in the closing statement are the responsibility of the seller and buyer to prorate.”


“Buyer and seller agree to adjust the pro-rations amongst themselves.”


Any reference to “see the sales contract” requires the sales contract to include acceptable language.


Pro-ration of taxes

Acceptable

“Seller assigns the liability for the payment of property taxes to the purchaser and purchaser accepts such assignment, and purchaser agrees to pay in full by the current year due date.”


“Payment of all outstanding taxes and assessments not paid at settlement and those incurred in the future are assumed by purchaser.”


A Few Things to Remember

  • If the property tax is paid by the due date, no documentation is required.

  • If the taxes for the year in which the property was sold go unpaid, a tax lien is issued against the property. It is filed in the name of the Jan. 1 owner unless the Jan. 1 owner provides the tax commissioner with acceptable proof of the transfer of tax liability (see above).

  • If proof of the transfer of tax liability is provided within 90 days of the tax payment due date, the tax lien is filed in the name of the new owner. Ex. If the tax is due Dec. 1, 2020, proof needs to be received by Mar. 2, 2021.




Updated 1/4/2023



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