Property taxes: paid in arrears
In Florida, the fiscal year runs January 1 to December 31. 2025 taxes are calculated in September 2025, billed in November 2025, due by March 31, 2026 at latest. So at a July 2025 closing, 2025 taxes aren't precisely known yet.
Calculation method
- Title company takes 2024 paid taxes (millage rate × 2024 assessed value).
- Calculates prorata from January 1, 2025 to closing day.
- Credits this amount to buyer (who'll pay full 2025 bill in November).
Example
July 1, 2025 closing, 2024 taxes = $6,600:
- Seller's 2025 ownership period: January 1 to June 30 = 181 days.
- Proration: 181/365 × $6,600 = $3,273.
- Seller credits $3,273 to buyer at closing.
- Buyer pays full 2025 bill in November 2025.
Risk
If 2025 taxes increase significantly (post-sale reassessment, loss of Save Our Homes cap), buyer pays more than credited. Request a tax proration adjustment if known gap.
HOA / condo: paid in advance
HOA and condo dues are generally prepaid (monthly or quarterly prepaid).
Example
July 15, 2025 closing, $600/month condo dues paid July 1:
- Seller paid $600 for full July.
- Their ownership ends July 14 inclusive = 14 days.
- Buyer owns July 15 to 31 = 17 days.
- Buyer credits seller: 17/31 × $600 = $329.
Insurance and utilities
Hazard insurance
Buyer takes a new policy from closing — generally no proration of old policy. Seller can recover unused premium directly from their insurer.
Exception: if contract specifies policy assumption, buyer takes existing policy and credits seller for unused premium balance.
NFIP flood insurance
NFIP policies are sometimes transferable to new buyer if still valid. Verify with insurer. Proration applicable if transferred.
Utilities
- Electricity (FPL, Duke): final reading on closing day. Seller closes account. Buyer opens new account.
- Water: same.
- Gas: same.
- Internet, cable: transfer or termination by seller.
No Settlement Statement proration — each pays consumption directly to utility company.
Calculation method
Two common FL methods:
365-day (standard method)
Divide annual cost by 365, multiply by days.
360-day ("banker's year")
Divide by 360, multiply by days. Historically used by title companies, still common.
Gap between methods minimal over 1 year. The FAR/BAR contract doesn't specify, so title company uses default convention.
Common disputes
- 2025 tax estimate incorrect when seller loses Homestead exemption. Buyer can request proration on corrected estimated basis rather than actual 2024 taxes. Negotiate in contract or by addendum.
- HOA fees increased between signing and closing. Proration on new or old amount?
- Special assessment announced after signing but before closing: who pays? Per contract, but if seller knew before signing and didn't disclose, possible recourse.
- HOA estoppel letter different from initial quote. Verify at closing.
Every figure, rate, threshold, and deadline in this guide is drawn from a verifiable primary source listed at the bottom of the page. The article is updated whenever the underlying rules change, with a fresh review date stamped at the top.
Sources and references
All sources were publicly accessible at the last review date. Figures and rules may change; verify the current version before any decision.
- Florida Statutes Chapter 197 — Tax Collections, Sales, and Liens. flsenate.gov
- Florida Statutes §718 — Condominium Act, estoppel letters. flsenate.gov
- Florida Statutes §720 — Homeowners' Associations. flsenate.gov
- NFIP Policy Transfer. fema.gov/flood-insurance
- Florida Department of Revenue — Property Tax Oversight. floridarevenue.com/property
You've completed Topic 01.7
Closing costs and taxes covered. Chapter 01 Acquisition complete at 90 % (37 of 39 planned articles published).