Short answer
Proration means you and the buyer each pay property taxes, and often water and sewer, for the days you own the house. At closing the settlement agent splits the bills by the closing date, so if you have prepaid, you get credit, and if a bill is unpaid, you pay your share. Tax calendars differ by place.
What proration means
When a bill covers a period that crosses your closing date, the settlement agent divides it so each person pays for the days they owned the house. If you already paid a tax bill for a period that continues after closing, the buyer credits you for their share. If a bill covering your period is not yet paid, the amount due from you is deducted from your proceeds.
The adjustments show up as credits and charges on the settlement statement.
Why dates differ in Pennsylvania
Pennsylvania property taxes can come from several taxing bodies, including the county, the municipality and the school district, and each can bill on its own calendar. This answer does not verify the billing calendar for any specific county, so the safest approach is to ask your title company which tax periods apply to your parcel and whether bills have been paid.
If you are in Philadelphia, ask the settlement agent to confirm what is open on your account before you close.
Ask for the tax receipts or a printout from the tax office, so you can see which periods are paid. Bring that to the title company early, because an unpaid balance is easier to deal with before closing day than on it.
Utilities and other items
Water and sewer charges can also be prorated or paid from proceeds, and municipalities may place a lien for unpaid charges that must be cleared at closing. Rents and security deposits matter if the house has tenants, and the settlement should address both.
Homeowner association dues, if any, are usually prorated as well. Ask for a payoff or estoppel letter from the association.
How to check the numbers
Ask for the draft settlement statement a day or two ahead. Check the closing date used for each proration. Check that every bill credited to you was really paid. Look for a tax or utility item that appears on only one side.
If a figure looks wrong, ask the settlement agent to show how it was calculated. A mistake found before signing can be corrected on the spot.
It also helps to keep your last tax bill and water bill handy. If you pay taxes through a mortgage escrow, your lender will refund any escrow balance after payoff, usually separately from closing, so do not count on it at the table.
How a cash sale affects it
Prorations work the same way in a cash sale. If the house has unpaid taxes or utility liens, a cash buyer will count them against your proceeds. Kaizen Home Buyers buys as-is, makes a cash offer within 24 hours, and closes typically in 14 to 30 days or on your date. Tell us about any unpaid taxes up front at 267-329-0084, so they are in the numbers from the start.