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Who Pays Property Taxes at Closing in Georgia

Who Pays Property Taxes at Closing in Georgia?

Buying a home is an exciting and significant milestone in anyone’s life. However, along with the joy of homeownership comes the responsibility of paying property taxes. In the state of Georgia, the question of who pays property taxes at closing is a common concern for both buyers and sellers. In this article, we will explore the intricacies of property tax payments at closing and provide answers to some frequently asked questions.

Property Tax Basics in Georgia

Property taxes in Georgia are assessed based on the fair market value of the property, as determined by the county tax assessor’s office. The tax rate varies across different counties and is typically expressed as a percentage of the assessed value. These taxes are levied by the county and municipal governments to fund various public services such as schools, roads, and public safety.

Who Pays Property Taxes at Closing?

In Georgia, property taxes are typically prorated between the buyer and the seller at the time of closing. Prorating means that the taxes for the current year are divided between the parties based on the number of days each party owns the property during that year.

The closing attorney or title company handling the transaction is responsible for calculating the prorated taxes and ensuring that they are accurately reflected on the closing statement (also known as the settlement statement or HUD-1). The closing statement is a document that details all the financial transactions involved in the purchase or sale of a property, including the allocation of property tax payments.

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The buyer is responsible for paying their share of the property taxes from the closing date until the end of the year, while the seller is responsible for paying their share up to the closing date. The prorated amount is usually paid through an escrow account. The buyer’s lender may require them to establish an escrow account to collect funds for property taxes and insurance premiums.

Frequently Asked Questions:

Q: How are property taxes calculated in Georgia?
A: Property taxes in Georgia are calculated based on the assessed value of the property and the applicable tax rate. The assessed value is determined by the county tax assessor’s office, while the tax rate varies by county. To calculate the tax amount, multiply the assessed value by the tax rate percentage.

Q: What happens if property taxes are not paid at closing?
A: It is essential to ensure that property taxes are paid at closing to avoid any legal complications. If property taxes are not paid, the tax authorities may place a lien on the property, which could result in foreclosure.

Q: Can property taxes be negotiated during the closing process?
A: Property taxes are not typically negotiable during the closing process. The tax amount is determined based on the assessed value and the applicable tax rate, which are set by the county.

Q: Are there any exemptions or discounts available for property taxes in Georgia?
A: Yes, Georgia offers various exemptions and discounts for certain individuals or properties. These include exemptions for senior citizens, disabled individuals, veterans, and properties used for conservation purposes. It is advisable to contact the county tax assessor’s office to determine if you qualify for any exemptions or discounts.

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Q: Can property tax assessments increase after closing?
A: Yes, property tax assessments can increase over time due to changes in the property’s value or changes in the tax rate. It is essential to be aware of potential tax increases and budget accordingly.

In conclusion, property taxes in Georgia are prorated between the buyer and the seller at closing. The responsibility for paying property taxes is divided based on the number of days each party owns the property during the year. It is crucial for both buyers and sellers to understand their obligations and ensure that property tax payments are made promptly to avoid any legal issues. If you have any specific questions or concerns regarding property taxes at closing, it is recommended to consult with a knowledgeable real estate attorney or a trusted closing agent.

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