Tax-Related Closing Costs
Property Taxes
Property taxes in Florida are paid in arrears. That is, the taxes begin accruing on January 1st of the year, but do not become due until November 1st of that same year, and delinquent on April 1st of the following year. As such, these costs are typically prorated between the buyer and seller. At the time of closing, the taxes have typically not yet been paid for the current tax year and the Seller would reimburse the Buyer for the period in which the Seller occupied the property (ie. January 1st until the date of closing). Hence, a credit to the Buyer. If the taxes have already been paid at the time of closing, they would be prorated accordingly.
Transfer Taxes & Recording Fees
This is the cost for transferring ownership of the property and recording the purchase documents. The fee is often calculated as a percentage of the sales price.
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