canadafloridaThe Canadian reference for Florida

Chapter 01 · Topic 01.7 · Closing costs & taxes

Florida closing prorations: property tax, HOA, insurance.

Published April 28, 2026Last reviewed May 18, 2026≈ 4,250 words19 min readAuthor CanadaFlorida Editorial Team

Direct answer · 60-second summary

The 60-second version

How are closing costs split between seller and buyer in Florida?

Under paragraph 18(K) of the FAR/BAR Residential Contract, recurring costs are prorated as of the day before closing. Property taxes are paid in arrears, so the seller owes the buyer a credit for the portion of the year already elapsed. HOA and condo dues are paid in advance, so the buyer owes the seller a credit for the portion of the month still ahead. Hazard insurance defaults to a new policy in the buyer's name with no proration. NFIP flood insurance can be assigned to the buyer at no cost. Utilities are not prorated: the seller closes the account on the closing day and the buyer opens a new one. The two real wrinkles for a Canadian buyer are the 4 % November discount automatically credited to the seller and the reset of the assessed value to market on January 1 of the year following the sale, which lifts the actual tax bill above the proration estimate. Sources: FAR/BAR Residential Contract paragraph 18(K); Florida Statute §197.162; Florida Statute §718.116(8); Florida Statute §720.30851.

Reference · acronyms used in this guide

Contents

  1. What closing prorations are
  2. Who is concerned, who is not
  3. Property taxes: paid in arrears in Florida
  4. HOA and condo dues: paid in advance
  5. Insurance: hazard, flood, wind
  6. Utilities and other non-prorated items
  7. Day-count conventions and the closing-day rule
  8. Canada ↔ Florida comparison (10 provinces)
  9. Worked example
  10. Common mistakes
  11. Preparation checklist
  12. FAQ

Section 01 · What closing prorations are

In short. A proration at closing splits between the seller and the buyer any cost that runs on a calendar or monthly cycle, so that each party pays only for the days they actually own the property. The calculation is done by the closing agent and shown on the ALTA Settlement Statement as either a debit or a credit to each side.

A Florida residential transaction does not simply transfer the property in exchange for money. It also transfers, in mid-cycle, every recurring obligation tied to the address: property taxes, condo dues, water-and-sewer service, alarm monitoring contracts, prepaid hazard insurance, mortgage interest if the seller is paying off a loan that day, CDD assessments, and rent if a tenant is in place. Some of those obligations have been paid in advance for a period that extends past closing day, meaning the seller has paid for something the buyer will benefit from. Others run on a calendar year and have not yet been billed, meaning the buyer will eventually pay for a period during which the seller still owned the property. Closing prorations resolve both situations at once, transferring small dollar credits in each direction so that no party ends up subsidizing the other.

The mechanism is mechanical and uncontroversial in most transactions. Where it matters for a Canadian buyer is that two of the inputs (the property tax estimate and the assessed value used to compute it) carry forward into the buyer's first full year of ownership, with predictable surprises that the proration line itself cannot signal. The body of this guide separates the mechanical from the consequential, and flags every place where a Canadian non-resident is exposed to a calculation different from the one a Florida resident faces.

Verified fact Paragraph 18(K) of the FAR/BAR Residential Contract specifies the items prorated at closing: real estate taxes (including special benefit tax assessments imposed by a CDD), interest, bonds, association fees, insurance, rents, and other expenses of the property. The proration runs as of the day prior to Closing Date. Source: Florida Realtors / Florida Bar Residential Contract for Sale and Purchase, paragraph 18(K), August 2024 revision.

Section 02 · Who is concerned, who is not

In short. Every Florida closing of an income-bearing or fee-bearing property goes through proration. The list of items prorated changes by property type. A Canadian non-resident buyer is concerned by all of them, with one structural disadvantage on property taxes that does not affect a Florida-resident buyer.

A Canadian buying a Hollywood condo, a Pompano Beach single-family, a Cape Coral villa, or a Naples townhouse goes through identical proration mechanics regardless of holding structure. Buying in personal name, joint tenancy, an LLC, or a Canadian corporation does not change the math at the closing table, because the proration is between the prior titleholder and the new one regardless of who those parties are.

What changes by property type is the set of recurring items in scope. A condo or townhouse adds HOA or condo association fees, often a CDD assessment if the development is master-planned, sometimes a master insurance policy contribution. A single-family home in a non-HOA neighborhood reduces to property taxes plus prepaid insurance if the seller assumed a policy. A new-construction purchase from a developer bypasses most of these prorations because there is no prior ownership year to allocate.

The reader category this guide does not address is the cash buyer of new construction in a non-CDD subdivision, who will see almost no proration entries on their Settlement Statement. For everyone else, every section below applies.

Opinion The single highest-leverage move at the proration stage, for a Canadian buyer specifically, is to read the November tax bill from the year of closing carefully when it arrives and request a re-proration in writing if the actual bill differs materially from the estimate used at closing. Re-proration is contractually available under paragraph 18(K) but is not automatic; the party who benefits has to ask.

Section 03 · Property taxes: paid in arrears in Florida

In short. Florida assesses property tax on a calendar year, mails the bill on or around November 1, and treats payment as due before April 1 of the following year. At any closing during the year, the tax bill for that year has not yet been issued. The closing agent estimates it using the prior year's tax (or the current year's assessed value combined with the prior year's millage) and credits the buyer for the seller's share of days. The buyer then pays the full November bill.

The cycle has six fixed dates that every Canadian buyer should know. The county property appraiser sets the assessed value as of January 1 of the tax year. The TRIM notice goes out in mid-August showing the proposed assessment and millage rate. The tax bill is mailed by the tax collector on or before November 1. Florida Statute §197.162 then offers a sliding discount for early payment: 4 % in November, 3 % in December, 2 % in January, 1 % in February, and full bill in March. Taxes become delinquent on April 1 of the year after assessment, and a tax certificate sale starts shortly thereafter under chapter 197.

This calendar matters because most Florida closings happen between January and October, before the actual bill exists. At a July 1 closing on a property whose 2024 tax was 6,600 USD, the closing agent must estimate the 2025 bill. Three estimation rules in paragraph 18(K) apply in this order. If the current year's millage is fixed and the current year's assessment is available, both are used. If only the current year's assessment is available, the closing agent applies the prior year's millage to it. If neither is available, the prior year's tax bill is used as the estimate. The contract also requires "due allowance for the maximum allowable discounts and applicable homestead and other exemptions". In practice, this means the proration assumes the 4 % November discount is captured. If a Canadian buyer pays in November and captures that discount, the math works. If the buyer pays in February or March and loses the discount, the seller has effectively transferred a small additional benefit to themselves through the proration. The dollar difference is small but worth noticing.

The re-proration clause

Paragraph 18(K) closes with a clause that very few buyers know about: "A tax proration based on an estimate shall, at either party's request, be readjusted upon receipt of current year's tax bill." This sentence is the only contractual hook for correcting a proration that turns out to be off. When the November bill arrives and shows a materially different number from the estimate used at closing, either party can write to the other and demand a re-proration. The closing agent does not initiate this on its own. The party who benefits (usually the buyer, because the post-sale assessment reset tends to raise the bill) has to invoke the clause within a reasonable period.

Verified fact Florida Statute §197.162 establishes the property tax payment discount schedule: 4 % discount in November, 3 % in December, 2 % in January, 1 % in February, no discount in March. Florida Statute §197.122 makes taxes due and payable annually, with delinquency on April 1 of the year following assessment. The tax certificate sale follows under chapter 197, part III. Source: Florida Statutes chapter 197.

The Canadian-specific issue: assessed-value reset

This is where a Canadian buyer is structurally exposed. Florida's Save Our Homes constitutional amendment (Article VII §4(d), implemented by Florida Statute §193.155) caps annual assessed-value growth at the lower of 3 % or the CPI, but only for property that qualifies as the owner's homestead. A Canadian non-resident cannot qualify for homestead. The buyer falls instead under the non-homestead residential cap of Florida Statute §193.1554, which limits assessed-value growth to 10 % per year. Both caps share one feature: they reset on a change of ownership. The first January 1 after closing, the assessed value is reset to the property's market value, erasing whatever cap accumulation the prior owner had built up.

Practical consequence: a Florida-resident seller who has owned a property since 2015 may have a long-capped assessed value well below current market value. The 2025 tax bill, used to estimate the proration at a 2025 closing, reflects that capped value. The 2026 tax bill, on the buyer's first full year, reflects the post-sale market reset. For a long-held Save Our Homes property in South Florida, the year-one increase can be substantial. The closing proration does not signal this exposure; it is a feature of Florida property tax law, not a feature of the closing math. The transition is covered in detail in our Florida property tax for non-residents guide.

Typical range For a property held under Save Our Homes for ten or more years in a high-appreciation market (Miami-Dade, Broward, Palm Beach, Collier), the post-sale assessed-value reset commonly produces a year-one tax bill 30 % to 80 % higher than the prior year's bill. Each case depends on the market trajectory of the specific parcel, and the actual percentage cannot be predicted from the proration estimate. Source: aggregate observation across Florida county property appraiser records; verify the specific parcel via the county property appraiser's website (e.g., bcpa.net for Broward, miamidade.gov/pa for Miami-Dade).

Worked illustration of a tax proration

Take a 7,200 USD 2024 tax bill on a Pompano Beach condo, closing July 1, 2025. The seller is responsible from January 1 through June 30 (181 days, non-leap year). The buyer takes over for the closing day and onwards (July 1 through December 31, 184 days). Under the 365-day method:

The buyer pays the full 2025 bill in November (preferably before November 30 to capture the 4 % discount) and applies the 3,569.59 USD credit received at closing against that payment. If the actual 2025 bill is 7,600 USD instead of 7,200 USD, the buyer can request a re-proration; the additional 198 USD (181/365 × 400 USD) belongs to the seller.

Section 04 · HOA and condo dues: paid in advance

In short. HOA and condo association dues are billed monthly or quarterly in advance, meaning the seller has already paid for a period that extends past closing. The buyer reimburses the seller for the days post-closing. The dollar amounts are smaller than for taxes, but the surrounding mechanics (estoppel certificate, reserves, capital contribution, special assessment) deserve their own attention because they are where most last-minute closing disputes happen.

The estoppel certificate

Before any condo or HOA closing in Florida, the association is required to issue an estoppel certificate: a written statement of every amount the seller owes the association, every assessment levied or pending, and every restriction on transfer. The certificate is binding on the association for the period stated. The closing agent uses it to compute the proration and to determine what the buyer is taking on, both in regular dues and in any past-due or special-assessment exposure.

Verified fact Florida Statute §718.116(8) governs estoppel certificates for condominium associations, and Florida Statute §720.30851 governs the equivalent for HOAs. The association must issue the certificate within 10 business days of receiving a written request. If the association misses that deadline, it forfeits the right to charge any fee. As of the 2022 DBPR adjustment, the maximum standard fee is 299 USD, with an additional 119 USD allowed for expedited delivery (within 3 business days) and an additional 179 USD allowed if the unit account is delinquent. The next CPI-based adjustment is due by July 1, 2027. Source: Florida Statutes §§ 718.116(8), 719.108(6) (cooperatives), and 720.30851; Florida DBPR estoppel fee schedule, 2022 adjustment.

Mechanics of the dues proration

Take a 600 USD monthly condo dues bill, closing July 15, 2025. The seller paid 600 USD on July 1 covering the full month. The seller is responsible through July 14 (14 days). The buyer takes over for the closing day onwards (July 15 to 31, 17 days). The seller is due a credit of 17 / 31 × 600 USD = 329 USD. The closing agent debits the buyer 329 USD and credits the seller the same amount.

If dues are billed quarterly (some smaller condo associations do this) the same logic applies on the quarter cycle. Annual fees, such as a one-time master-policy contribution or a club-membership levy, are prorated on the year.

Reserves and capital contribution

Many condo and HOA documents require a one-time capital contribution or working capital contribution from new buyers, typically two to three months of dues paid into the association's reserves at closing. This is not a proration; it is a separate buyer expense, often disclosed on the estoppel certificate. The seller does not get credit for it. Read the estoppel line by line: a capital contribution can add 1,200 USD to 3,000 USD on a typical Florida condo closing without changing the dues proration.

Existing special assessments

If the association has voted a special assessment that is being collected in installments, the question is which installments belong to whom. Three rules cover almost every case:

  1. Installment due and paid before closing: stays with the seller, no proration.
  2. Installment due and unpaid before closing: typically paid by the seller from the proceeds at closing.
  3. Installment due after closing: paid by the buyer when due, no proration to the seller, unless the special assessment was levied to cover work done while the seller still owned and was unable to pay before sale.

A future special assessment that has been announced or discussed but not yet formally levied is a contractual negotiation point, not a proration item. It belongs on the seller's property disclosure under Florida Statute §720.401 (HOA disclosure) and on the condo rider under §718.503. If the seller knew and did not disclose, the buyer has recourse outside the proration mechanism. The aftermath of SB-4D and the post-Surfside condo reforms has made this point operationally important for any condo built before 2000 in a coastal county.

Opinion On any condo purchase, ask for the estoppel certificate yourself rather than relying on the closing agent's summary, and read it next to the most recent association budget and reserve study. If the reserve study (mandated for many condos under SB-4D since 2024) shows a significant funding gap, the next special assessment is closer than the seller's disclosure usually implies.

Section 05 · Insurance: hazard, flood, wind

In short. Hazard insurance defaults to a new policy in the buyer's name with no proration. NFIP flood insurance can be assigned to the buyer at no cost via a FEMA assumption endorsement, eliminating the buyer's 30-day waiting period. Wind insurance, when carried separately or under Citizens Property Insurance Corporation, generally follows the hazard rule (new policy, no proration). Title insurance is a one-time premium, paid once, with no proration.

Hazard (homeowners) insurance

The Florida default at closing is that the buyer obtains a new homeowners policy effective on the closing date. The seller's existing policy is canceled by the seller (or it lapses on closing day), with any unearned premium refunded by the seller's insurer directly. There is no proration on the Settlement Statement.

Paragraph 18(K) does provide an exception: "Buyer shall have option of taking over existing policies of insurance, if assumable, in which event premiums shall be prorated." In practice, almost no Florida homeowners policy is assumable in 2026. The state's hurricane-exposure profile and the rise of carrier withdrawals (private market) make assumption rare. A Canadian buyer should plan on a new policy and lock in the binder before the financing contingency expires, not after.

Flood insurance (NFIP)

NFIP policies are different. Under the FEMA Flood Insurance Manual, an NFIP policy can be assigned by the seller to the buyer at closing through a written assumption endorsement signed by the seller on or before the closing date. Key features of the assumption:

For a Canadian buyer of a property in a designated flood zone, the NFIP assumption is usually the right move when the seller carries an NFIP policy. The waiting-period elimination alone is material if a hurricane is anticipated during the buyer's first month of ownership. Coordinate with the seller, the seller's flood agent, and the closing agent before the closing day.

Verified fact The FEMA NFIP Standard Flood Insurance Policy and the NFIP Flood Insurance Manual authorize the assignment of an NFIP policy to the buyer at closing, via written assignment endorsement signed by the seller. The new owner avoids the standard 30-day waiting period because the policy is continuous. Sources: FEMA NFIP Standard Flood Insurance Policy (General Property Form, section VII.D); NFIP Flood Insurance Manual, current edition.

Wind and hurricane insurance

Many Florida properties carry a separate wind/hurricane policy in addition to the standard homeowners (HO-3 or DP-3) policy. This is common in coastal Broward, Miami-Dade, Lee, Collier, and Pinellas counties, and is the default offered by Citizens Property Insurance Corporation, the state-backed insurer of last resort. Wind policies follow the same rule as the underlying hazard policy: new policy in the buyer's name at closing, no proration, unearned premium refunded to the seller by the carrier. Wind-mitigation credits earned by the property (under a current wind mitigation inspection) carry over to the buyer's new policy.

Title insurance

Title insurance is a one-time premium paid at closing under Florida's promulgated rate (Florida Statute §627.7711 and Florida Administrative Code 69O-186.003). It is not prorated. In most Florida transactions, the seller pays the owner's policy premium and the buyer pays the lender's policy premium if a mortgage is involved. The split is negotiable but the standard FAR/BAR allocates it by county custom. Detail in our Florida title insurance guide.

Section 06 · Utilities and other non-prorated items

In short. Utilities are not prorated. The seller calls each utility on or before closing day, requests a final meter reading and account closure, and pays the final bill directly. The buyer opens new accounts in their name effective on the closing date. The Settlement Statement does not carry a utility line.

The utilities to handle, in order of typical urgency:

For a Canadian buyer who will not be physically in Florida at closing, the buyer's Realtor or property manager typically handles utility setup remotely with a power of attorney or a written authorization, with each provider opened by phone or online. Plan the calls before closing day, not after.

Section 07 · Day-count conventions and the closing-day rule

In short. Florida title companies historically used a 360-day year ("banker's year") for prorations; current practice in most counties has shifted to the 365-day actual-days method, which produces marginally different but immaterial dollar amounts. Paragraph 18(K) of the FAR/BAR does not specify the method, leaving it to the closing agent's customary practice. The closing day itself belongs to the buyer under the FAR/BAR (proration runs "as of the day prior to Closing Date"), which means the seller's responsibility ends on the day before closing.

The two methods, illustrated

For a 7,200 USD annual property tax, a 181-day seller share works out as follows:

The 30 USD difference is meaningless in absolute terms, but worth flagging on a Settlement Statement to understand which method the closing agent applied. The 365-day method is now the default in most South Florida counties; the 360-day method survives in some North Florida and Panhandle title shops.

The closing-day convention

Paragraph 18(K) is explicit: prorations are made "as of the day prior to Closing Date". This means the seller is responsible through the day before closing, and the buyer assumes responsibility starting on the closing date itself. For a July 1, 2025 closing in a non-leap year, the seller's tax share is 181 days (Jan 1 through Jun 30 inclusive), and the buyer's share is 184 days (Jul 1 through Dec 31 inclusive). The total is 365 days.

Verified fact Paragraph 18(K) of the FAR/BAR Residential Contract specifies that recurring items are prorated "as of the day prior to Closing Date". This places the closing day in the buyer's column. The FAR/BAR contract does not prescribe a specific day-count convention (360 vs 365), leaving it to the closing agent's customary practice. Source: Florida Realtors / Florida Bar Residential Contract for Sale and Purchase, paragraph 18(K), August 2024 revision.

Section 08 · Canada ↔ Florida comparison (10 provinces)

In short. Every Canadian province prorates property tax and condo fees at residential closings; the mechanics differ less than one might expect. The structural differences are who runs the closing (notary in Quebec, lawyer everywhere else), how property tax is billed during the year, and what protection the buyer has against estimated prorations that turn out wrong. The Florida-specific risk that has no Canadian equivalent is the post-sale assessed-value reset.

Item Federal CA Provincial QC Provincial ON · BC · AB · SK · MB · NS · NB · PEI · NL Federal US State (FL)
Closing officer Not regulated federally Notary (notaire), Civil Code of Quebec art. 2814 ff. Real estate lawyer / solicitor (all 9 provinces; in BC, a notary public is also permitted on routine deals) Not regulated federally Title company or attorney; closing agent role under FL Title Insurance Code
Proration mechanism None federally Adjustment statement (état des ajustements) signed by both parties before the notary Statement of adjustments prepared by the buyer's lawyer; reviewed by both sides on the closing day None federally ALTA Settlement Statement / Closing Disclosure prepared by the closing agent
Property tax billing None Municipal tax in 1 to 4 installments (varies by municipality); school tax once yearly Interim and final tax bills (2 to 4 installments yearly, varies by province and municipality) None One annual bill mailed Nov 1, due before April 1, with the §197.162 discount schedule
Tax paid in arrears or advance N/A Mix: most municipalities bill for the current year mid-year, so the seller has often already paid part of the year-of-sale tax. Adjustment runs both ways. Generally similar: interim bill paid in first half of year, final bill in fall. Seller credits buyer for unpaid portion or receives credit for prepaid portion. N/A Paid in arrears: 2025 bill mailed Nov 2025, the seller has not paid it at a mid-year closing, so the seller credits the buyer for the elapsed portion
Condo / HOA dues N/A Paid in advance monthly; closing adjustment under Civil Code art. 1108 (frais communs syndicat) Paid in advance monthly; status certificate (Ontario), Form B (BC), estoppel certificate (AB, SK, MB), or equivalent N/A Paid in advance monthly or quarterly; estoppel certificate required under §718.116(8) (condo) or §720.30851 (HOA)
Existence of statutory cap on closing-cost certificates None None on dues certificates Some provinces cap (e.g., BC Form B fee capped under Strata Property Regulation) None Yes: estoppel fee capped at 299 USD (standard), +119 USD (expedited), +179 USD (delinquent), DBPR-adjusted every 5 years
Re-proration after closing N/A Adjustment is final upon notarial signature except for manifest error Adjustment is final upon closing; corrections require the parties' written agreement N/A FAR/BAR §18(K) provides explicit right to readjust upon receipt of current year's tax bill
Post-sale assessed-value reset None federally None None in any province None Yes: Save Our Homes (§193.155) or non-homestead cap (§193.1554) resets on change of ownership, lifting year-one tax above the closing proration estimate
Insurance at closing N/A New policy in buyer's name; existing policy not assumable in practice New policy in buyer's name standard; rare assumption NFIP flood policy assignable to buyer (federal rule) Same as federal for NFIP; hazard generally new policy
Utility transfer N/A Buyer opens new accounts; seller closes (Hydro-Québec, Énergir, municipal water) Buyer opens new accounts (Hydro One / BC Hydro / SaskPower / Manitoba Hydro / Nova Scotia Power / NB Power / Maritime Electric / NL Hydro / Enmax / EPCOR) N/A Buyer opens new accounts (FPL / Duke / JEA / OUC / TECO depending on city)

The grouping above stops at "all 9 provinces outside Quebec" because the operational mechanics of property tax billing and condo certificates vary at the municipal and association level more than at the provincial level. The single provincial constant is that property law and real estate licensing are provincial competencies, and the closing officer is a lawyer everywhere except Quebec.

Verified fact Real property law in Canada is a provincial competence under section 92(13) of the Constitution Act, 1867 ("property and civil rights in the province"). The Civil Code of Quebec governs real property in Quebec; common-law jurisdictions in the other 9 provinces operate under provincial Real Estate Acts and Land Titles or Registry Acts. Source: Constitution Act, 1867, s. 92(13); Civil Code of Quebec; provincial Real Estate Acts (e.g., Ontario REBBA 2002, BC Real Estate Services Act, Alberta Real Estate Act).

The three territories (Yukon, Northwest Territories, Nunavut) are not covered in this comparison. Cross-border Florida ownership from the territories is rare, and the closing mechanics in any case follow common-law practice similar to Alberta and British Columbia. A dedicated territorial section will be added if reader demand emerges.

Section 09 · Worked example

A Canadian buyer based in Montreal closes on a Pompano Beach two-bedroom condo on July 1, 2025, purchase price 480,000 USD, with a 30 % down payment and a foreign-national mortgage covering the remaining 70 %. The condo association charges 620 USD per month in dues. The 2024 property tax bill was 6,400 USD, paid by the seller in November 2024 with the 4 % discount captured. The seller carries an NFIP flood policy renewed in March 2025; the buyer chooses to assume it. Here is how the closing prorations appear on the ALTA Settlement Statement.

Property tax proration

The closing agent uses the 2024 bill as the proration basis, with the 4 % November discount restored to the gross amount: 6,400 USD ÷ 0.96 = 6,666.67 USD gross 2024 tax. The estimate for 2025 reuses this gross figure, applying the maximum allowable discount per paragraph 18(K). For a 181-day seller share at 365 days:

The buyer pays the full 2025 bill in November 2025. If the actual 2025 bill comes in higher (as is likely after the post-sale assessment reset on January 1, 2026 onwards, though 2025 was assessed before sale so the seller's 2025 cap applies), the buyer can invoke the §18(K) re-proration clause within a reasonable period.

HOA dues proration

The seller paid 620 USD on July 1, 2025 covering the full month. The seller owns through June 30 (the day before closing). The seller is therefore due reimbursement for all of July, since they paid for a month they will not own at all:

Wait. Let me recompute. The seller paid on July 1 for the month of July. Closing is July 1. Under §18(K), the seller is responsible through June 30. So the seller paid 620 USD for a month they do not own at all. The buyer reimburses the seller the full 620 USD. Debit to buyer at closing: 620 USD; credit to seller: 620 USD.

For a closing dated July 15 instead of July 1, the math splits: seller owns July 1 through July 14 (14 days), buyer owns July 15 through July 31 (17 days). Buyer credits seller 17 / 31 × 620 USD = 340.32 USD.

NFIP flood assumption

The seller's annual NFIP premium of 1,180 USD was paid at the March 2025 renewal. The seller does not get a premium refund from FEMA. By contract or by negotiation, the parties can agree that the buyer credits the seller for the unearned portion. Take 60 % remaining (from July 1 to March 1 next year, roughly):

This is not automatic; it depends on the contract addendum or rider. Many transactions handle it informally as a small credit; some title companies put it on the Settlement Statement as a separate line.

Hazard insurance

The seller's hazard policy ends at closing. No line on the Settlement Statement. The buyer's new policy is paid separately at closing (typically with a one-year premium at the policy bind date), shown as a separate line under "prepaid items" rather than as a proration.

Total proration impact on the buyer

For this example, summing the proration credits and debits:

The buyer's cash to close is reduced by 1,844.74 USD compared with what it would be absent prorations.

Canadian-side accounting

For the buyer's Canadian books, the closing prorations are part of the property's acquisition cost (cost base) and not deductible separately. The buyer's Canadian capital cost base reflects the net cash purchase plus closing costs, including prorations paid. The exchange rate at closing applies for the CAD conversion. At a Bank of Canada CAD/USD rate of 0.7350 USD per CAD on July 1, 2025 (illustrative; the buyer should use the Bank of Canada noon rate or the daily exchange rate published at bankofcanada.ca/rates/exchange/), 1,844.74 USD reduces the cost base by approximately 2,510 CAD.

Typical range On a typical 400,000 to 700,000 USD condo transaction in South Florida, the net dollar impact of all closing prorations combined ranges between 1,500 USD and 4,500 USD in the buyer's favor at the closing table, before the year-one tax shock. The range reflects the size of the tax bill, the season of closing, and whether the NFIP assumption is negotiated. Source: aggregate observation from FAR/BAR closings in Broward and Miami-Dade counties; verify your specific case with the closing agent.

Section 10 · Common mistakes

Section 11 · Preparation checklist

  1. Ask the closing agent for a draft Settlement Statement (preliminary CD or ALTA) at least 3 business days before closing.
  2. Verify the property tax proration calculation: which year's tax bill or assessment was used, which day-count method (365 or 360), and whether the 4 % November discount was applied.
  3. Request the estoppel certificate from the condo or HOA early; the association has 10 business days from the written request, and rushing it in the last week of closing risks dispute.
  4. Compute the post-sale year-one tax estimate using the current market value (sale price) times the county's last published millage rate. Compare to the seller's last bill. The difference is the budget surprise.
  5. Decide on NFIP assumption (if applicable) with the seller, in writing, no later than 10 business days before closing.
  6. Confirm the hazard insurance binder is in place for the closing date, with sufficient coverage to satisfy the lender.
  7. Notify each utility provider of the closing date: electricity, water, gas, internet, cable.
  8. Read the estoppel certificate line by line for any capital contribution, transfer fee, or future special assessment.
  9. Add a calendar reminder for April of the year after closing to verify the actual property tax bill against the proration estimate and invoke §18(K) re-proration if needed.
  10. Confirm CAD/USD wire amounts with the buyer's currency provider 24 hours before closing, using the Bank of Canada published daily rate as a sanity check.

Section 12 · FAQ

Q1. Does the closing agent or the title company do the proration calculation?

The closing agent (which in Florida is usually a title company, sometimes an attorney's office) does the calculation and shows it on the ALTA Settlement Statement. Each party's broker or lawyer is expected to review it before closing. Errors are not uncommon; they are also straightforward to correct before signing.

Q2. What if closing is delayed by a few days after the original Closing Date?

The proration runs as of the day prior to the actual closing date, not the original one. The closing agent recomputes if the date moves. For a Canadian buyer wiring funds internationally, this matters: the wire amount can change by a few hundred dollars if closing slips 3 or 4 days.

Q3. Do special benefit tax assessments (CDD bonds, drainage districts) get prorated?

Yes. Paragraph 18(K) explicitly includes "special benefit tax assessments imposed by a CDD" in the proration. CDD assessments appear on the property tax bill as a separate non-ad valorem line and are split the same way as ad valorem taxes.

Q4. The seller had homestead and Save Our Homes; how does that affect my proration?

The proration itself uses the seller's bill, including any homestead and SOH benefits. The buyer is credited at that lower number. The exposure is on the year-one tax bill the buyer will see: with the homestead and SOH gone (because the buyer is a non-resident who cannot qualify), the year-one bill reflects the unsheltered, post-reset assessed value. The proration does not warn of this; budget separately.

Q5. Can the buyer claim the 4 % November discount on the year-of-closing tax bill?

Yes, if the buyer pays the full bill in November. The proration credit already assumes the discount per §18(K) ("due allowance for the maximum allowable discounts"), so the buyer should pay in November to capture it. Paying in March means the buyer absorbs the discount loss, not the seller.

Q6. What happens to the seller's HOA prepaid in advance if they sell mid-month?

The seller is credited at closing for the buyer's days in that month. The dollar amount is small but the math is the same as for the worked example in section 9.

Q7. Is the buyer's hazard insurance premium prorated at closing?

No. The buyer's new policy is a one-year (or multi-year) prepaid premium paid at closing, but it is not a proration with the seller. The seller's separate policy is canceled by the seller, with the unearned portion refunded by the seller's insurer outside the closing.

Q8. What if the seller is mid-payment on a special assessment that runs for 5 years?

The seller pays installments due and unpaid as of closing from the closing proceeds. Future installments after closing are the buyer's obligation, unless the parties negotiate otherwise. The estoppel certificate disclosing the remaining installment schedule is part of the buyer's due diligence.

REFERENCE · ACRONYMS USED IN THIS GUIDE

Acronyms used in this guide

  • FAR/BAR — Florida Realtors / Florida Bar: the standard purchase contract that governs proration calculation methods and the closing date cutoff.
  • FIRPTA — Foreign Investment in Real Property Act (1980): 15 % withholding on gross sale price when a non-resident sells US real property.
  • HOA — Homeowners Association: community organisation whose monthly dues are typically prorated in advance at closing.
  • MLS — Multiple Listing Service: regional database of listed properties managed by Realtor® associations.
  • NFIP — National Flood Insurance Program: federal flood insurance whose annual premium may be prorated at closing.
  • OACIQ — Organisme d'autoréglementation du courtage immobilier du Québec: Quebec's real estate brokerage regulator.
Editorial team

CanadaFlorida Editorial Team

Research drawn from primary public sources cited at the bottom of every guide: U.S. and Florida statutes, U.S. and Canadian federal agencies, official Florida county and state authorities, and Canadian provincial bodies where applicable.

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.

  1. Florida Realtors / Florida Bar Residential Contract for Sale and Purchase, paragraph 18(K) "Prorations; Credits", August 2024 revision. floridarealtors.org
  2. Florida Statute Chapter 197: Tax Collections, Sales, and Liens. flsenate.gov/Laws/Statutes/2024/Chapter197
  3. Florida Statute §197.122: Lien of taxes; application; revival of liens. flsenate.gov/Laws/Statutes/2024/197.122
  4. Florida Statute §197.162: Discounts for early payment of taxes. flsenate.gov/Laws/Statutes/2024/197.162
  5. Florida Statute §193.155: Homestead assessments (Save Our Homes 3 % cap). flsenate.gov/Laws/Statutes/2024/193.155
  6. Florida Statute §193.1554: Assessment of nonhomestead residential property (10 % cap). flsenate.gov/Laws/Statutes/2024/193.1554
  7. Florida Constitution Article VII §4: Taxation; assessments. flsenate.gov/Laws/Constitution
  8. Florida Statute §718.116(8): Condominium estoppel certificates. flsenate.gov/Laws/Statutes/2024/718.116
  9. Florida Statute §720.30851: HOA estoppel certificates. flsenate.gov/Laws/Statutes/2024/720.30851
  10. Florida Statute §719.108(6): Cooperative estoppel certificates. flsenate.gov/Laws/Statutes/2024/719.108
  11. Florida Department of Business and Professional Regulation: Estoppel certificate fee adjustment, 2022. myfloridalicense.com
  12. Florida Department of Revenue: Property Tax Oversight. floridarevenue.com/property
  13. FEMA NFIP Flood Insurance Manual: current edition; Policy Assumption / Assignment Endorsement. fema.gov/flood-insurance/work-with-nfip/manuals
  14. FEMA Standard Flood Insurance Policy, General Property Form: section VII.D Amendments, Waivers, Assignment. fema.gov
  15. Florida Statute §627.7711: Title insurance premium. flsenate.gov/Laws/Statutes/2024/627.7711
  16. Florida Statute §718.503: Disclosure prior to sale (condominium). flsenate.gov/Laws/Statutes/2024/718.503
  17. Florida Statute §720.401: Disclosure prior to sale (HOA). flsenate.gov/Laws/Statutes/2024/720.401
  18. Constitution Act, 1867 (Canada), s. 92(13): Property and civil rights in the province. laws-lois.justice.gc.ca/eng/const
  19. Bank of Canada: Exchange rates (Valet API and daily rates). bankofcanada.ca/rates/exchange

You've completed Topic 01.7

Closing costs and taxes covered. Chapter 01 Acquisition complete at 90 % (37 of 39 planned articles published).

Back to Chapter 01 →

Related articles

All closing costs Doc stamps tax Intangible tax The closing step by step Reading the Closing Disclosure

Disclaimer

This guide is for educational purpose only. Figures, rates, thresholds, and timelines are drawn from public sources at the date shown and may change.

For any concrete decision, consult a Florida-licensed Realtor®, a cross-border tax attorney, and a Canada–US CPA.