Indiana property taxes are paid in arrears, so at closing the seller owes the buyer for time they already lived in the property but have not yet been billed for. This free calculator estimates that seller credit. Enter the last known tax amount and a closing date — nothing is looked up automatically, and every figure should be confirmed with the county treasurer before anyone relies on it.
Indiana bills property tax one year behind. The bill that arrives in a given year is based on the assessed value as of January 1 of the previous year, and it is normally paid in two installments due May 10 and November 10.
Because of that lag, a seller at closing is responsible for two separate things:
The second piece is where most of the confusion lives. Nobody has received that bill, so the amount has to be estimated from the most recent figure available.
The seller credits the buyer for taxes accrued during the seller's ownership that have not yet been billed, and the buyer becomes responsible for paying the bills once they come due. Because Indiana bills in arrears, the buyer often pays a tax bill covering a period when the seller owned the home — the credit at closing is what squares that up.
It means the bill you pay this year covers a prior period rather than the current one. In Indiana, taxes billed in a given year are calculated on the assessed value from January 1 of the year before. You are always paying for time that has already passed.
Indiana property taxes are normally due in two installments, on May 10 and November 10 each year. Counties vary in when bills are mailed, so the exact timing of the statement is worth confirming with the county treasurer.
The unbilled current-year portion is prorated by days: the seller's share runs from January 1 through the closing date, and the buyer's share runs from closing through December 31. Any outstanding installment from the prior assessment year is added on top in full, since the seller owned the property for that entire period.
It depends on whether it has been paid by closing, which is exactly why the calculator asks. If the spring installment is still outstanding at closing, it usually comes out of the seller's proceeds. If it was already paid, it does not appear as a credit at all. Getting this wrong can move the number by a full half-year of taxes.
Deductions do not automatically transfer. If the seller had a homestead deduction and a mortgage deduction and the new owner does not qualify for the same ones, the next bill can be substantially higher than the figure used to estimate the proration. This matters most when an owner-occupant sells to an investor.
No. This is an estimate to set expectations early in a transaction. The binding proration appears on the settlement statement prepared by the title company handling the closing, using verified figures from the county.
IndyLegal Title Services has handled title insurance, closing and escrow for buyers, sellers, agents and lenders in Indiana since 2008. If you have a transaction coming up, you can order title or call us at 317-214-6023.
