Quick Answer
Because Indiana property taxes are billed a year in arrears, prorating them accurately takes extra care so neither side over- or underpays. Your title company calculates the split and shows it on your settlement statement.
- Most common proration
- Property taxes
- Calculated by
- Your title company
- Shown on
- The settlement statement
- Indiana quirk
- Taxes are billed in arrears
Why Indiana Property Tax Prorations Take Extra Care
Indiana bills property taxes for the prior year, so the tax bill you are prorating at closing often does not match what either party will actually owe going forward. Title companies typically estimate using the most recent bill and note that figures are approximate.
Ask your title company to walk through the specific tax proration method they are using so you understand what you are being credited or charged for.
Other Items That Can Be Prorated
Beyond property taxes, prorations can cover HOA dues, prepaid utilities transferred to the buyer, and occasionally rents on an investment property. Each is split based on the closing date.
These figures show up as small credits or debits on your Closing Disclosure and settlement statement, so review them alongside the bigger line items.
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Frequently Asked Questions — Prorations
Why are Indiana property tax prorations more complicated?
Indiana bills taxes a year behind, so the closing proration is often an estimate rather than the exact final amount.
Who calculates prorations?
Your title company calculates them and shows the results on the settlement statement.
Can HOA dues be prorated too?
Yes, prepaid HOA dues are commonly prorated between buyer and seller at closing.
Will I owe more property tax later because of the proration?
It's possible if the proration was based on an older bill. Ask your title company how they estimated the amount.