# advice on property tax for new home owner



## nho82 (Dec 23, 2014)

I purchased my home in July 2013. In June 2014 I received a notice from my bank that they had paid my property tax in full to the city. My question is.. Since I purchased my home in July.. Shouldn't I have paid only half the taxes due.. July-Dec?? I am pretty sure the seller had paid the other half during our closing.

Can someone advise if my assessment on this is accurate or do I need some schooling?

Thanks
NHO


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## Just a Guy (Mar 27, 2012)

You always pay a split year (6 months forward, six months backwards). So the tax year is actually June to june, not January to December. When you buy/sell a place, the lawyers make adjustments and you get credits on the sale. 

If your purchase price is less than the assessed value, you may want to appeal the taxes. It could save you some money.


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## cainvest (May 1, 2013)

Just a Guy said:


> So the tax year is actually June to june, not January to December.


I think the tax year runs Jan - Dec but you usually pay it somewhere in the middle of the year, at least for most cities I know.


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## Just a Guy (Mar 27, 2012)

Yes the tax year is jam-dec but you wind up paying in June (as you pay an entire year in June you wind up paying six months into next year, this is why you pay a July - June basis), the new rate is usually set in December.


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## cainvest (May 1, 2013)

Just a Guy said:


> Yes the tax year is jam-dec but you wind up paying in June (as you pay an entire year in June you wind up paying six months into next year, this is why you pay a July - June basis), the new rate is usually set in December.


Are we saying the same thing or something different?
Just did a quick search which showed what I thought it was, if you paid you taxes in full in June of 2014, your taxes are up to date for all of 2014 and none of 2015.


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## nho82 (Dec 23, 2014)

Just a Guy said:


> Yes the tax year is jam-dec but you wind up paying in June (as you pay an entire year in June you wind up paying six months into next year, this is why you pay a July - June basis), the new rate is usually set in December.


So the tax bill is from jan-dec but you pay it in June. That is what I understand. So technically in June 2014 I should be paying taxes from June 2013-Dec 2013. The Jan-Jun was paid by the previous owner.

Now what I also understand from what you said.. The lawyer already made adjustments to that. How are these adjustments made.. Is it reduced from my mortgage amount or is it given to my bank to pay for the taxes? 

I hope my question makes sense.

NHO.


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## Just a Guy (Mar 27, 2012)

If you look at your paperwork from the purchase, you get a credit/debit off the purchase price of the home...it's one of many fees/adjustments (like lawyer fees, CMHC fees, etc.) which all get worked out in your final purchase price.

I may have the timeframe confused a bit as to when the property tax credit/debit thing works. The June payment is the key, can eat may be correct in that it's all the same year and there was no payment made for jan-jun so the seller would be billed and you'd get the credit on your purchase price and then you'd pay the full amount at the end of June. So that would explain the pay 6 months back and 6 months forward.

If you bought it after July, you wouldn't pay the taxes (as they've already been paid) you'd pay the seller back for July-dec. 

My mistake, as you can see it can be confusing...but then again no one wants to pay taxes at Xmas.


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## My Own Advisor (Sep 24, 2012)

@nho82, depends on what the paperwork says when you purchased the home. Your lawyer should have advised you what taxes have been paid, what have not been paid to date on the property and as part of the transaction, that item out of many should have been itemized. 

Same goes for hydro, gas, etc., there is a change-over of all these things and in some cases there might be a credit applied, meaning you don't have to pay as much or in other cases you owe more money at time of closing. 

When in doubt about the standing of your property tax bill, you can always call your City's finance department, give them the roll # and find out the status. If you owe the City money, don't worry, they will come find you and charge you interest on any balance due


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## OhGreatGuru (May 24, 2009)

nho82 said:


> I purchased my home in July 2013. In June 2014 I received a notice from my bank that they had paid my property tax in full to the city. My question is.. Since I purchased my home in July. Shouldn't I have paid only half the taxes due.. July-Dec?? I am pretty sure the seller had paid the other half during our closing.
> 
> ...
> 
> ...


In all likelihood, the taxes for second half of 2013 (which previous owner had presumably paid) were one the final adjustments made on closing, wherein you would have had to reimburse the previous owner for half the 2013 taxes.

The letter from the bank means they have paid the full amount of the 2014 tax bill, which would have been due in full in June, if not earlier. Presumably you are paying it through your mortgage, a part of which goes to a tax account. They collected tax money from you during the second half of 2013, and the first half of 2014, so they had sufficient funds on hand to pay the tax bill for 2014 . They always collect enough money in advance to pay the bill when it comes due. Depending on when your mortgage started, and the predicated rate of rise of the tax bill, you may see an adjustment in the tax portion in subsequent years. But in this case it will probably not be much because of the timing of your purchase.


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