How Are Property Taxes Prorated at Closing in Florida?

Florida Property Taxes Are Paid in Arrears

The first thing to understand is that Florida property taxes run on a calendar year (January 1 through December 31) and are paid in arrears. The tax bill for 2026, for example, covers the entire 2026 calendar year but is not mailed until November 2026. The bill is due by March 31, 2027.

This creates a timing issue at closing. If a property sells in June, the seller has lived in the home for six months without paying the current year's taxes. The buyer will eventually receive the full-year tax bill. To make this fair, the title company calculates a proration at closing, giving the buyer a credit for the seller's share of the current year's taxes.

How the Proration Is Calculated

The standard method in Florida works like this:

1. Determine the estimated annual tax amount. If the current year's tax bill has not been issued yet (which is common for closings before November), the title company uses the prior year's tax bill as the estimate.
2. Divide by 365 to get the daily tax rate.
3. Count the number of days the seller owned the property in the current calendar year (January 1 through the day before closing).
4. Multiply the daily rate by the seller's days to get the seller's share.
5. Credit the buyer that amount on the closing disclosure.

Example: Closing on June 15, 2026

The buyer receives a $2,712.60 credit on their closing disclosure. When the actual 2026 tax bill arrives in November, the buyer pays the full amount, having already been reimbursed for the seller's portion.

What If the Actual Tax Bill Is Different?

Because the proration is based on the prior year's tax bill, the actual bill may be higher or lower. This is common when:

• The property was reassessed: If the sale price is significantly higher than the previous assessed value, the new tax bill will likely increase.
• The seller had a homestead exemption: The new owner may not qualify for the same exemption, which could raise the taxable value.
• Millage rates changed: County and municipal tax rates are set each September and may go up or down.

In these cases, the buyer may end up paying more in taxes than what was credited at closing. This is an important point for agents to communicate to their buyer clients early in the process.

The Homestead Exemption Factor

If the seller has a Florida homestead exemption, the proration is calculated using the seller's lower (exempted) tax amount. But the buyer's future tax bill may be significantly higher because:

• The homestead exemption does not transfer to the buyer. The buyer must file their own application by March 1 of the following year.
• The Save Our Homes cap (which limits annual assessed value increases to 3%) is removed when the property changes hands. The property is reassessed at full market value.
• This means a property that was assessed at $250,000 under Save Our Homes might be reassessed at $450,000 after the sale.

The gap between the prorated credit and the actual tax bill can be thousands of dollars. Making sure your buyer understands this before closing protects both the client and the agent's reputation.

What Realtors Should Watch For

• Review the closing disclosure early. Confirm the proration amount and the tax estimate being used. If the prior year's taxes seem unusually low (because of a long-standing homestead exemption), flag it for the buyer.
• Remind buyers to file for homestead. If the buyer intends to make the property their primary residence, they need to file with the county property appraiser by March 1 of the year after purchase.
• Watch for non-ad valorem assessments. Special assessments for water, sewer, fire, or community improvements are prorated separately and can add significant amounts to the closing figures.
• Cash buyers can prepay. If the current year's tax bill has already been issued (November or later closings), it is usually paid in full at closing rather than prorated.

Barnes Walker's title team handles property tax prorations on every closing. If you have a deal where the numbers look off or you need help explaining the proration to a client, call us at 941-778-7721. We do this every day across Manatee and Sarasota counties.