Why Ohio sellers credit the buyer for taxes
Ohio property taxes are billed for the year before. The Summit County Fiscal Office says it directly on its tax bill explanation: “In the State of Ohio, real estate taxes are billed for the prior year.” So the bill you pay in early 2027 is for tax year 2026.
That means on any closing date, you owe taxes for months that have not been billed yet. Because the buyer will pay those bills after closing, the contract usually has you credit the buyer for your share. The result looks like a charge on the seller side of the settlement statement and a matching credit on the buyer side.
Sellers are often surprised by this line, because they have paid every bill on time. Paying on time in Ohio still leaves you a year behind.
How the title company figures the credit
The credit is a daily calculation from the most recent known tax amount. The usual steps:
- Take the latest full-year tax amount from the county bill, after credits and rollbacks.
- Divide by 365 to get a daily rate.
- Count the days of unpaid tax you owe: the days in the prior year not yet paid, plus the days of the current year up to closing.
- Multiply and show the total as a seller debit and buyer credit.
Example. Annual taxes are $3,650, so the daily rate is $10. You close on April 30, 2027. You paid the first half of tax year 2026 in early 2027, but the second half of 2026 is not due until summer. You owe the unpaid half of 2026, $1,825, plus 2027 from January 1 to April 30, which is 120 days or $1,200. The credit to the buyer is about $3,025.
Your purchase agreement controls the method. Some contracts prorate on the last bill, others on a percentage of it, and a few let the parties agree to no proration.
When the tax due dates fall
R.C. 323.12 lets an owner pay the full year by December 31, or half by December 31 and the other half by June 20. In practice Ohio counties often set later dates on the bill, and Summit County mails real estate bills twice a year, about 270,000 per collection across 74 tax districts.
The due dates matter for proration because they decide whether a half has already been paid when you close:
- Closing before the first-half bill is paid: you usually owe a full year of prior-year tax, plus the current year to date.
- Closing between the halves: you owe the unpaid second half, plus the current year to date.
- Closing after both halves are paid: you owe only the current year to date.
If your taxes are escrowed, your lender pays the bills, but the proration still runs between you and the buyer. Any escrow balance comes back to you after the payoff.
Rollbacks, homestead and the owner-occupancy credit
The proration uses net taxes, so credits on your bill matter. The Summit County Fiscal Office lists three that show up on residential bills: the non-business credit, the owner-occupancy credit, and the homestead reduction for qualifying seniors and disabled owners.
These reductions are tied to the owner. A buyer who won’t live in the house, or who doesn’t qualify for the homestead reduction, may see a higher bill than yours. R.C. 319.202 makes the deed paperwork address this: the statement of value must say whether the seller’s reductions will show up in the buyer’s taxes and, if so, that both sides “have considered and accounted for” them. The Ohio conveyance fee guide covers that DTE 100 form.
Special assessments and delinquent taxes
Special assessments for things like sewer lines, street lights or demolition often appear on the tax bill. Contracts usually handle them separately from the regular tax proration, so read the assessment clause.
Delinquent taxes are not prorated at all. Past-due taxes, penalties and interest are paid from your proceeds in full so the buyer gets clean title. If you are behind, see our guide to delinquent property taxes in Ohio before you set a closing date.
Proration when the tax bill is about to change
The proration uses the last known bill, so it can be off when taxes are about to change. A new levy passed by voters, a countywide reappraisal, or a change in your homestead status can make the next bill higher or lower than the one used at closing. Most contracts treat the proration as final at closing; a few call for a re-proration once the new bill is issued. If a large change is coming, ask the title company how your contract handles it.
Checking the proration on your settlement statement
Ask the title company for the draft settlement statement a few days before closing and check three things:
- The tax amount used. It should match the latest bill on the county auditor or fiscal office website, net of credits.
- The dates. Make sure the halves you already paid are not being charged again.
- The method. Compare it to the tax clause in your purchase agreement.
A mistake here is easy to fix before you sign and hard to fix after. For the other lines on the same statement, see the full list of seller closing costs in Ohio. If you’d like us to show you how taxes would be handled in a direct sale, send us the address.
