Buying or selling in Meadowlane and feeling unsure about how property taxes get split at closing? You are not alone. Property tax proration is one of the most confusing line items on a Closing Disclosure, especially when you add lender escrow deposits to the mix. In this guide, you will learn how proration works in Lincoln and Lancaster County, see simple Meadowlane examples, and understand what your lender’s escrow will mean for your first-year costs. Let’s dive in.
What tax proration means
Property tax proration divides the year’s taxes between buyer and seller based on how long each owned the home during the tax year. You are not paying the county at closing. You are settling up with the other party so each side covers their share of the year.
On the Closing Disclosure, you will usually see proration as a seller credit and a buyer debit. If the seller prepaid taxes, you might see the reverse. The goal is simple. Each party pays for the time they owned the property.
Proration is usually calculated daily: annual tax divided by 365, then multiplied by the number of days of ownership in the tax year. Local conventions can differ on whether the day of closing counts for the seller or the buyer. Many use seller responsible through the day of closing. Some use the day before. Your title company will confirm which method is used for your file.
Who actually pays the county
The county treasurer collects the tax bill. Proration at closing only reallocates the cost between buyer and seller. The party who pays the county depends on whether the bill has been issued or paid when you close.
- If taxes are unpaid at closing, the title company will handle credits so the right party funds the upcoming bill.
- If taxes were prepaid, proration reimburses the payer for the other side’s share.
Either way, the Closing Disclosure reflects the agreed method so the financial responsibility matches ownership time.
Local checks to make in Lancaster County
For accuracy in Meadowlane closings, your team should verify a few items with county offices and your closing agent:
- Get the parcel number and check the most recent assessed value, current tax amount, and payment status with the county.
- Ask the title company to obtain a tax certificate or current tax status from the Lancaster County Treasurer. This will show any outstanding taxes, liens, or prepayments.
- Confirm whether any exemptions apply, such as homestead or disability, and whether the buyer needs to reapply after purchase.
- Ask the title company which day-count convention they will use for proration.
When the current tax bill is not available
Sometimes the current-year bill has not been assessed or issued by the time you close. When that happens, closing agents often use the prior year’s tax amount as an estimate. They may also estimate based on assessed values and mill levies. Your purchase contract may allow or require estimated proration with a possible adjustment later when the actual bill arrives. The title company will note the estimate on your settlement paperwork.
If the home was recently improved or reassessed, the most recent bill may not reflect the new tax amount. Your title company should flag this and use a reasonable estimate.
Worked examples for Meadowlane closings
These sample calculations use an annual tax of 3,650 dollars and a 365-day year. They are for illustration. Your Closing Disclosure will show the actual amounts used in your transaction.
Example A: Mid-June closing, seller responsible through closing day
- Closing date: June 15
- Daily tax: 3,650 dollars divided by 365 equals 10 dollars per day
- Seller’s days: January 1 through June 15 inclusive equals 166 days
- Seller’s share: 10 dollars times 166 equals 1,660 dollars
- Buyer’s share: 3,650 minus 1,660 equals 1,990 dollars
- Settlement entry: Seller receives a 1,660 dollar credit. Buyer is debited accordingly.
Example B: Early November closing, seller responsible through day before
- Closing date: November 1
- Daily tax: 3,650 dollars divided by 365 equals 10 dollars per day
- Seller’s days: January 1 through October 31 equals 304 days
- Seller’s share: 10 dollars times 304 equals 3,040 dollars
- Buyer’s share: 3,650 minus 3,040 equals 610 dollars
- Settlement entry: Seller receives a 3,040 dollar credit. Buyer is debited accordingly.
Small differences can occur with rounding or if a leap year is used. Your title company’s worksheet will show the math they applied.
How escrow affects your first-year costs
If you are getting a mortgage, your lender will likely require an escrow account for property taxes. The lender collects money each month, holds it, and pays the taxes when due. At closing, you will probably fund an initial escrow deposit so there is enough money on hand for the next tax payment.
Here is what to expect:
- Initial deposit. Lenders estimate how much is needed between your closing date and the next tax payment, plus a small reserve allowed by federal rules. With 3,650 dollars in annual taxes, the monthly escrow need is about 304.17 dollars. If the next bill arrives soon after you close, the deposit may be higher to cover it.
- Monthly escrow. After closing, your mortgage payment includes principal, interest, and monthly escrow for taxes and insurance. The lender will adjust the escrow each year based on actual bills.
There are two common scenarios around closing:
- Scenario A: Taxes were paid by the seller shortly before closing. You may still need to fund escrow at closing so the lender can pay the next bill when it comes due.
- Scenario B: Taxes are unpaid at closing and the seller is credited for their share. The title company may handle payments so the upcoming bill gets paid on time. Your lender may still collect an initial deposit to be ready for the next cycle.
The key point for buyers is that you will likely see two separate tax-related line items on your Closing Disclosure. One is the proration between you and the seller. The other is the lender’s initial escrow deposit collected from you. Your total cash to close can be higher than the proration alone because of the escrow deposit.
Step-by-step: Read your Closing Disclosure
Use this quick walkthrough to make sense of the numbers before you sign.
Find the proration line. Look for “County Taxes” or similar under Calculating Cash to Close or Summaries of Transactions. You will see a seller credit and buyer debit or the reverse if taxes were prepaid.
Confirm the daily rate and day count. The daily rate should match the annual tax divided by 365. Ask your closer which day counts for the seller versus the buyer in your file.
Review the initial escrow deposit. Find the “Initial Escrow Payment at Closing” section. This shows how many months of taxes are being collected and the total deposit.
Reconcile the math. Compare the proration math with the example framework above. Keep the escrow deposit separate in your review so you understand both figures.
Ask about timing. Confirm who will pay the next county bill and when the lender will start paying from escrow.
Checklists for Meadowlane buyers and sellers
Seller checklist
- Provide your parcel number and most recent tax bill to the title company.
- Ask your title company to obtain a tax certificate or payoff statement from the Lancaster County Treasurer.
- Verify any special assessments or unpaid taxes. These are usually payoff items at closing.
- Confirm the proration convention used. Ask whether you are responsible through closing day.
Buyer checklist
- Confirm the property’s parcel number and ask the closing team to verify any outstanding bills or liens.
- Ask your lender how much they plan to collect for the initial escrow deposit.
- Review your Closing Disclosure. Find the tax proration and the initial escrow deposit, then walk through the math with your closer.
- If you qualify for an exemption, ask about the county application process and timing.
What this means for your Meadowlane move
When you understand proration, you can plan your cash to close with more confidence. In Meadowlane and across Lincoln, the exact entries on your Closing Disclosure depend on timing, whether a bill has posted, and your lender’s escrow needs. Your title company and lender will guide the final figures and handle payments so bills are made on time.
If you would like a simple worksheet to estimate your proration and escrow deposit for your specific closing date, we are happy to help you run the numbers and coordinate with your closer and lender.
Ready to get clarity on your next move in Meadowlane or anywhere in Lincoln? Schedule a consultation with Rachel Rentschler to plan your closing timeline, review your numbers, and move forward with confidence.
FAQs
How does property tax proration work in Lancaster County?
- Taxes are split based on how many days each party owns the home in the tax year, usually using a daily rate from the annual bill, with the seller typically credited for their share and the buyer debited.
Who pays the next county tax bill after a Meadowlane closing?
- The county collects from whoever is on the tax roll when payment is due, while proration at closing reallocates the cost between buyer and seller regardless of the name on the bill.
What if the current-year tax bill is not issued before my Lincoln closing?
- Closing agents commonly use the prior year’s bill or an estimate based on assessed values, then note that figures may be adjusted when the actual bill arrives.
How does my lender’s escrow change what I pay at closing?
- You will likely see an initial escrow deposit collected at closing in addition to proration, so your total cash to close may be higher than the proration alone.
If the seller prepaid the full year, do we still prorate at closing?
- Yes, the seller would receive a credit for the buyer’s share of the year, and the buyer may still fund an escrow account so the lender can pay the next cycle.
Who decides the exact proration rules on my file?
- The title or closing agent applies local practice and your purchase contract terms, so ask them which day-count convention and figures they are using in your Closing Disclosure.
