What are tax pro rations - explanation of Michigan property taxes

Here is a quick explanation of tax pro rations. In the Metro Detroit real estate market we pay our Michigan property taxes in advance.

So whether you are buying Livonia real estate or Farmington Hills real estate you will owe the seller back the tax money they have already paid.

I am just going to explain about summer tax pro rations in this blog. Each year the homeowner pays their summer taxes on July 1. So this year we paid our Michigan property taxes on July 1, 2009. They are paid up until June 30, 2010. So if the seller sells his house on October 30, 2009 he hasn't used 8 months of property taxes. From October 30 to July 1, 2010 is taxes the seller has paid for but not used. The seller want his unused tax money back.

The buyer has to pay the unused Michigan property taxes back to the seller. This is common practice when selling a home. There is no way around not paying tax pro-rations.

I hope this explains a little bit about why you have to be prepared to pay tax pro-rations at closing. So many home buyers are not told about this and are surprised by this extra amount of money they need.

Russ Ravary your Metro Detroit real estate agent serving Wayne, Oakland, and Livingston Counties

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