Why Are My Property Taxes Collected at Closing When They are Not Due Yet?

If you’re selling your property and you’re closing in October, listen up because I want to talk to you about how property taxes are going to be prorated and collected.

Property tax statements in Texas, in our area especially, typically come out mid to late October. The second that statement is available and comes out, it is payable. It’s not due until the end of the year, but it’s payable as soon as it’s available.

The title company is going to collect for the entire year at closing.

Some sellers get a little antsy, and they’re like, “Well, it’s not due until the end of the year. Why are you collecting for all of it right now?”

It’s because it’s a payable bill out there, and they have that information. They have that tax statement, and they collect for the full amount at closing.

Let’s just say it’s October the 30th and you’re closing on that. They’re going to collect for the entire year, for 2026, those property taxes, and they’re going to prorate that between the buyer and the seller.

Say, “Okay, here’s the example. Seller, your property taxes are $5,000 for 2026. $5,000, and they divide it by 365 days. And the seller has owned it from January 1st till October the 30th, when you close.”

So they’re going to take your prorated share from you at closing, and then the buyer’s from them at closing, and they’re going to pay the entire year at closing. Nobody’s going to owe property taxes at all come the end of the year.

We’re going to give you another example. If you are refinancing your property—and I’m talking not just your home, it could be farm and ranch property, it could be investment property, commercial property, anything like that—if you’re even refinancing it and you’re closing at a title company and that tax statement comes out, they’re going to collect for it to be all paid at closing, the entire year.

Even though it’s not due until the end of the year, they’re going to go ahead and collect for it. And the lender is going to want to make sure that they collect for it as well.

Some people get a little antsy because they’re like, “I wasn’t planning on you collecting for that. I was going to pay it at the end of the year.”

Well, guess what? You’re paying for it at closing. Don’t have anything to do the rest of the year.