How property taxes are split at closing in New York

Each tax covers its own period

Central New York homes get separate bills that cover different stretches of time. Town and county taxes cover the calendar year and are billed in January. School taxes cover the school year, July 1 to June 30, and are billed in the fall. Village taxes usually cover June 1 to May 31 and are billed in early summer. Cities set their own schedules.

Paid or not yet billed

If the seller has already paid a bill that runs past the closing date, the buyer usually pays the seller back for the rest of that period. If a bill for the period the seller owned the home has not gone out yet, the seller usually credits the buyer for those days, and the buyer pays the bill when it comes.

Example: closing on November 1, the seller has paid the January town and county bill for the whole year, so the buyer pays back about two months of it. The fall school bill also runs to next June 30, so the buyer pays back about eight months of that one.

Use the seller’s actual bills, then budget for yours

The split at closing uses the bills the seller actually received, with the seller’s exemptions. Your own first full bills can be higher, because exemptions such as STAR, senior, veterans and disability belong to the seller and end with the sale.

LumeInsight shows both for any address: the usual split at a closing date you choose, and the bills you will get as the new owner.

Transfer tax is a separate cost

New York’s real estate transfer tax is $2 for each $500 of the price (0.4%) and is paid by the seller unless the contract says otherwise; if the seller doesn’t pay, the buyer must. On homes of $1 million or more, the buyer also pays the 1% mansion tax.

Questions

Who pays property taxes at closing in New York?

Each tax is usually split at the closing date over the period it covers. The buyer pays back the seller for prepaid days after closing; the seller credits the buyer for days before closing that have not been billed yet.

Who pays the transfer tax in New York State?

The seller pays the state real estate transfer tax ($2 per $500 of the price), unless the contract says otherwise. If the seller doesn’t pay, the buyer must. The buyer pays the 1% mansion tax on homes of $1 million or more.