Real Estate Closing Prorations Calculator
Calculate prorations at real estate closing for property taxes, HOA dues, and prepaid utilities using the 365-day method.
How Prorations Work at Closing
Prorations divide ongoing costs between buyer and seller fairly based on closing date. Most common items: property taxes, HOA dues, water/utilities, rents (if income-producing), insurance premiums. The seller pays for all days they owned the property up to closing; the buyer pays from closing day forward. Prorations appear on the HUD-1 / Closing Disclosure as adjustments to the seller's net proceeds. Source: ALTA Closing Protocol, state title company standards. Last updated: May 2026.
365-Day vs 360-Day Method
Two proration methods exist: 365-day: uses actual calendar days. More precise. Used in most US states (NY, NJ, MD, CA, IL, FL). 360-day (Banker's Year): assumes 30-day months. Simpler math. Used in TX, OK, and some commercial closings. The methods differ by only a few dollars on most residential closings — material on commercial deals.
Property Tax Proration Complexity
Tax calendars vary by state. Some pay in advance (FL, GA, CA — first installment due Nov 1 covers Jul 1-Dec 31). Some pay in arrears (IL — bills delayed 12-18 months, complicating prorations significantly). Some use fiscal year (PA — July 1 to June 30). Always reference the local tax calendar and use the actual paid-through date, not the calendar year.
HOA Proration Details
HOA dues are typically paid monthly in advance. If closing mid-month with HOA paid for the full current month, buyer pays seller for the remaining days. Special assessments (large one-time fees) follow the contract — usually seller pays for assessments levied BEFORE closing, buyer pays for those levied AFTER. Read the purchase contract carefully — assessment proration is a common dispute area.