Is it a bad time to buy parcels of land late in year? I was thinking if I acquire a property I may get hit with taxes since it’s almost the end of year. I wasn’t sure how that works. Any advice?
I wouldn’t let this slow you down. If anything, it could be just the kick some sellers need to sell now (to avoid paying another tax bill).
Not to mention, property tax bills on land are usually quite cheap.
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Good point. Thanks for feedback Seth!
It depends on how you handle pro-ration of taxes in teh contract.
If you are closing via a title company (i.e. not slef closing) - the title company will usually assume taxes for the current year will be pro-rated based on the transaction date and will typically credit the buyer and charge the seller for the year-to-date portion of the taxes (this is done on the HUD / settlement statement). Then, when taxes become due at the end of the year, the buyer is responsilbie to pay 100% of the taxes to the county.
If you are buying, you’ll likely want to inlcude wording in the contract that taxes for the current year will be pro-rated (and collect the YTD pro-rata portion at closing).
If are selling, and want to be clever, you can state “Current year taxes will be the obligation of the seller when they become due and payable.” If it get’s called out by the buyer, then it can become a negotiation item.
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