[Kaiminani]

I'm looking at a REO that currently has a tax assessment of roughly 4x the asking price. I'm concerned about getting socked with a massive property tax bill. My understanding is that it is beyond too late to get the evaluation changed for 2009, so this year's taxes are set in stone and are crushing. If I buy the property, I don't want to get stuck holding the bag for this year.

So, when are the taxes due? Are they prorated over the year, or is it that whomever is stuck with the hot potato on December 31st is the one on the hook for every penny?

[jjameson922]

I asked that same question myself previously and am still not sure of the answer. Not only does the buyer get stuck with taxes on property valued higher than it should be, the amount of those taxes figured monthly are deducted from what the bank feels you can finance monthly.

[olecapt]

Tax bills are pretty much cast in stone in December. You get to appeal in January and then it is all over.

You pay one quarter on August 17, 2009, one quarter on October 5, 2009, one quarter on January 4, 2010 and one quarter on March 1, 2010.

The custom in escrow is to prorate by the day. Take the total tax from July 1, 2009 to June 30, 2010 and divide by 365. Then multiply the number of days owned by each side of that year.

So the taxes you will owe goes down 1/365th each day

You can put it in the contract that the seller pays this fiscal years tax bill. May cost you the sale though if you don't have a listing agent start enough to realize what you are asking for...and many won't...or you can just discount your offering price by an offsetting amount.