When you’re buying or selling a property, there are many costs and calculations to consider—one of which is property tax proration. Tax proration ensures that both the buyer and the seller pay their fair share of property taxes during the year of the sale. Our free online Tax Proration Calculator makes it simple and fast for you to know exactly who owes what.
In this article, we’ll break down what tax proration is, why it matters, how it’s calculated, and how to use our easy-to-use tool to get accurate results in seconds. Whether you’re a buyer, seller, or real estate professional, this guide is your go-to resource for property tax proration.
Tax Proration Calculator
What Is Tax Proration?
Tax proration is the process of dividing annual property taxes between the buyer and the seller based on the date the property is sold or transferred. Since property taxes are usually paid yearly (often in advance or arrears), the proration ensures that each party pays only for the portion of the year they actually owned the property.
Example:
If a house is sold on June 30, and the annual property taxes are $3,650, the seller would be responsible for the taxes from January 1 to June 30 (181 days), and the buyer would pay from July 1 to December 31 (184 days). That’s exactly what a tax proration calculator determines.
Why Use a Tax Proration Calculator?
Doing proration calculations manually can be time-consuming and prone to error—especially when dealing with leap years, partial months, or local tax regulations.
Our Tax Proration Calculator:
- Saves time with instant results
- Eliminates guesswork and human error
- Is easy enough for buyers, sellers, agents, and lawyers to use
- Works for both 365-day and 360-day calculation methods
- Helps avoid disputes at closing by providing clarity
How Our Tax Proration Calculator Works
Step-by-Step Guide:
- Enter Annual Property Tax – Input the total tax amount for the year.
- Choose Tax Year Start and End Dates – Defaults to Jan 1 – Dec 31, but you can customize it.
- Input the Property Closing Date – The day the ownership transfers.
- Select Your Role – Choose whether you’re the buyer or the seller.
- Choose Calculation Method – Select between 365-day or 360-day proration.
Click the “Calculate” button and you’ll instantly see a breakdown of:
- Total days in the tax year
- Daily tax rate
- Number of days each party owns the property
- Amount owed by each party
Understanding the Two Main Proration Methods
1. 365-Day Method (Actual Day Count)
This is the most common method, which uses the actual number of days in the year (365 or 366 for leap years). It gives a more accurate calculation, especially when precise daily values matter.
Formula:
plaintextCopy codeDaily Tax = Annual Tax / 365
Seller’s Portion = Daily Tax × Days Owned by Seller
Buyer’s Portion = Daily Tax × Days Owned by Buyer
2. 360-Day Method (Banker’s Year)
This method assumes 12 months of 30 days each, totaling 360 days. It simplifies calculations but may slightly distort the actual tax responsibility.
Best for: Lenders and financial institutions who prefer uniform months.
Example Calculations
Let’s walk through two quick examples:
Example 1 – Using 365-Day Method
- Annual Tax: $3,650
- Closing Date: July 1
- Seller Days: Jan 1 – June 30 = 181 days
- Buyer Days: July 1 – Dec 31 = 184 days
Daily Tax: $3,650 ÷ 365 = $10/day
Seller Owes: $10 × 181 = $1,810
Buyer Owes: $10 × 184 = $1,840
Example 2 – Using 360-Day Method
- Same data, but now: Daily Tax: $3,650 ÷ 360 = $10.14/day
Seller Owes: $10.14 × 180 = $1,825.20
Buyer Owes: $10.14 × 180 = $1,825.20
Note: This example splits the year evenly for demonstration.
Who Should Use a Tax Proration Calculator?
- Home Buyers – Know exactly how much you’ll owe at closing.
- Home Sellers – Get reimbursed for your share of prepaid taxes.
- Real Estate Agents – Provide clients with professional-grade insights.
- Attorneys & Closing Agents – Use it during settlement processes.
- Title Companies – Ensure accuracy in final closing documents.
- Investors – Evaluate and compare costs when buying multiple properties.
Bonus: Other Costs You Can Prorate
While our calculator is built for property taxes, the concept of proration can also apply to:
- HOA dues
- Homeowners insurance
- Utility bills
- Rent (for investment properties)
- Maintenance contracts or service agreements
Future versions of our calculator may include these—stay tuned!
Is My Data Safe?
Yes. Our calculator is a client-side tool, which means all calculations are done within your browser. We do not store, track, or send your data to any server.
This ensures your privacy, security, and peace of mind.
Advantages of Using Our Calculator Over Manual Methods
| Manual Calculation | Our Tax Proration Calculator | |——————–|——————————|\n| Requires math & calendar work | Instant auto calculation | | May cause errors or disputes | Error-free and accurate | | Hard to explain during closings | Clear summary and print-friendly | | Not mobile-friendly | Works on phone, tablet, and desktop |
Who Can Use This Tool?
Our tool is designed to work globally, but it’s especially useful in:
- United States
- Canada
- United Kingdom
- Australia
- India (for land registration deals)
- Any country with annual property taxes
Pro Tips
- Double-check if taxes in your area are paid in arrears or advance.
- If you’re using the 360-day method, always assume 30-day months.
- Always consult with your closing agent or attorney for legal compliance.
- Keep a copy of the proration in your closing documents.
Final Words
Whether you’re a first-time homebuyer, experienced realtor, or property investor, understanding tax proration is key to a smooth and fair closing process. Our Tax Proration Calculator removes all the hassle and delivers clarity in just a few clicks.
No more spreadsheet headaches or arguments at the closing table—just simple, fast, accurate numbers.
👉 Try the calculator now and get instant results!
15 FAQs (Frequently Asked Questions) Tax Proration Calculator
What is a tax proration calculator?
A tax proration calculator helps divide property taxes fairly between a buyer and seller during a real estate transaction based on the closing date.
It determines how much each party owes.
Calculates using 365-day or 360-day method.
Speeds up real estate closings.
Why do I need to prorate property taxes?
Property tax proration ensures both the buyer and seller pay taxes only for the time they own the property.
Sellers don’t overpay for months they didn’t own.
Buyers don’t underpay for previous usage.
It ensures fairness in financial responsibility.
Who pays property taxes at closing—the buyer or the seller?
Both parties pay their fair share based on time of ownership within the tax year.
Seller pays from start of tax year to closing.
Buyer pays from closing date to year-end.
Proration splits this amount correctly.
How does the calculator handle leap years?
The calculator adjusts for leap years when using the 365-day method, making it accurate every year.
Leap year = 366 days.
Daily tax is lower due to extra day.
360-day method ignores leap years.
What’s the difference between 365-day and 360-day proration methods?
365-day uses the actual calendar days; 360-day uses 30-day months.
365-day is more precise.
360-day simplifies accounting (used by banks).
Choose based on preference or closing guidelines.
Can I use this calculator for any country?
Yes, the calculator is universal and works in any country with property taxes.
You can set any tax year start/end dates.
Enter any currency (₹, $, £, €).
Works best with annual taxes.
Is this calculator free to use?
Yes, it’s 100% free with no sign-up or payment required.
No ads or subscriptions.
Unlimited calculations.
Designed for buyers, sellers, and agents.
Can I use this tool on mobile or tablet?
Absolutely! The calculator is fully mobile-responsive.
Works on iPhones, Androids, and tablets.
Touch-friendly buttons.
Easy input and clear output layout.
Is my data safe while using this calculator?
Yes, all data stays on your device.
It’s a client-side tool—no servers involved.
No personal info is saved or transmitted.
Totally private and secure.
What if I enter the wrong date by mistake?
No worries—just re-enter the correct date and click “Calculate” again.
The tool updates instantly.
No need to refresh or reload the page.
Can this be used for commercial property sales?
Yes, this tool works for residential and commercial real estate.
Just enter the correct annual tax.
Method applies the same regardless of property type.
Can I change the tax year to match my local schedule?
Yes! The calculator allows custom tax year dates.
Useful in areas with fiscal years (e.g., July–June).
Ensures exact daily rate calculation.
Does this work if taxes are paid in arrears or advance?
Yes, the calculator is independent of payment schedule.
It focuses on ownership dates.
You can apply the results to both prepaid or owed tax scenarios.
Who uses this calculator the most?
It’s commonly used by real estate professionals, buyers, sellers, lawyers, and title companies.
Realtors use it during offers.
Attorneys use it during closings.
Homeowners use it to double-check fairness.
Niraj Ghanghoriya is a tech-savvy content creator with a passion for building advanced online tools and writing in-depth, user-focused guides. With a strong focus on clarity, engagement, and SEO, he simplifies complex topics to help users make informed decisions.