One thing you’ll probably not miss about the property you are selling is paying the property taxes. The good news is, as you pass this torch to the new owner, you may be even entitled to a refund for taxes you’ve already paid. On the flip side, it’s also possible that you may owe the buyer money for taxes you have not yet paid. As the seller you are responsible to make all payments that are due up to and including the day of closing. My office will review the tax statement that you provide to us to determine if you are entitled to a credit or owe a debit with respect to municipal property taxes. The seller is responsible for all taxes up to the day prior to the day of closing. The buyer is then responsible for all the taxes from (and including) the closing date to the end of the year.
Whether it’s the seller or the buyer who must pay, the amount owing to the other party is called the “property tax adjustment.” If you have not already done so, please forward to my office your most recent property tax statement from the municipality as soon as possible in order for us to calculate this adjustment.
The property tax adjustment is generally calculated by the seller’s lawyer and communicated to the buyer’s lawyer a few days prior to closing. If an adjustment is owed to you, it will be added to the purchase price and will be paid by the buyer through the buyer’s lawyer. If you owe the buyer, then it will be deducted from the purchase price of your property. For details on how the property tax adjustment is calculated, please click here.
Don’t forget to cancel pre-authorized payments
If you pay your property taxes (or any other bills) from your bank account through pre-authorized payments, don’t forget to contact your bank to cancel these payments as of the closing date. If you are selling a condominium, don’t forget to cancel pre-authorized payments of your maintenance fees.
Other fee adjustments for condo owners
If you are selling a condominium, there may also need to be an adjustment of your maintenance fees and/or property association fees as you pass them on to the buyer. Typically, condominium fees are paid on the first of every month. If you own the property on the day the bill is due, you must pay the whole fee. However, you will be reimbursed on closing day. For details on how this amount is calculated, please click here.
Please make sure you notify my office as soon as possible of the condo fees so that we can calculate the credit due to you.
If there have been any special assessments, extra charges (e.g., for roof or elevator repairs etc.) or any other notices given to you by the condominium board or management company please notify my office immediately.
If you have questions or concerns about these or any other issues related to the sale of your property, please contact my office by e-mail: email@example.com or phone: 519-824-7100.
Mark F. Graham
Mark F. Graham
Barrister, Solicitor, Public Notary
Mark Graham Law Office Professional Corporation