Glossary · Doing the deal
Prorated Property Tax
In short
At closing, property taxes are divided between the buyer and seller based on the number of days each party owned the property in the current tax period. This ensures each pays their fair share.
What it means in a deal
Property taxes are typically paid in arrears or advance for a specific period. At closing, the seller will be responsible for taxes up to the closing date, and you, the buyer, for the period after. This proration is a common closing adjustment handled by the escrow agent or attorney.
Related terms
Common questions about Prorated Property Tax
- Do unfiled tax returns or overdue taxes prevent SBA approval?
- What if the business I am buying has unfiled tax returns or overdue payroll taxes?
- What if the business I'm buying has unfiled tax returns or overdue payroll taxes?
- If I have unfiled tax returns or overdue taxes, will that prevent SBA 7(a) loan approval?
- What if the business I'm acquiring has pending tax audits or unresolved tax issues?
- Can an SBA 7(a) loan cover the property taxes due at closing for the acquired real estate?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
Line up financing while you're under LOI
Tell us the business, the price, and your timeline — we'll match you with lenders who close deals like yours and flag anything that stalls the process.
Free · No documents · Usually same-day
Backed by data on 1,000+ SBA lenders and 300,000+ funded deals. Your details go only to lending partners you ask to be matched with — never sold to advertisers.