Escrow & Title
A Florida property transaction closes on July 1. The annual property taxes of $3,600 have not yet been paid (they are due in November). How does this appear on the Closing Disclosure?
AAs a credit to the seller for taxes prepaid
BAs a debit to the seller and a credit to the buyer for taxes accrued but unpaid by the seller (January 1 – June 30)✓ Correct
CNo adjustment is needed since taxes are not yet due
DAs a debit to the buyer for taxes they will owe
Explanation
Florida property taxes are paid in arrears — the taxes for the prior year are due in November/December. At a July 1 closing, the taxes for January 1 through June 30 (181 days) have accrued but not been paid. The seller is charged (debited) for the 181 days they owned the property this year, and this amount is credited to the buyer who will pay the taxes when they come due.
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