Taxes follow the property and not the property owner. If a property is sold with property taxes still due, those unpaid property taxes are billed to the new owner. The amounts being billed may include an increase or decrease in the property tax levy for a current or prior tax year. For example, the tax may increase if the previous owner qualified for an exemption that the new owner does not, or it may decrease if the new owner made an appeal on the property’s value and the Appraisal District approved a value reduction.
Most often, property taxes are part of the negotiated closing process at the time of sale, with a portion of what is due or will become due, being allocated to the seller and a portion being allocated to the buyer.
If a title company is utilized for the sale/purchase of the property, the title company will ensure that there are no surprises for the buyer regarding property taxes. Prior to closing the sale of the property, they research all matters related to property taxes on the property, by working with the Appraisal District to anticipate any changes in exemptions, etc. which could impact the amount due for the current or a previous tax year. Title companies typically carry a form of errors and omissions insurance to protect all parties, if the title company’s property tax estimate is inaccurate for any reason. The parties involved in the sale may want to contact their title company to discuss the delegation of funds or what amounts they used, or to see if they have the insurance to protect all parties.