Definition
Property tax is the annual charge levied by your county based on the assessed value of your home, funding schools, roads and other local services. Many homeowners pay it through a mortgage escrow account, where a portion of each monthly payment is set aside and the servicer pays the tax bill on their behalf. If property taxes go unpaid, they eventually become a lien against the home that must be resolved before it can be sold. For a homeowner behind on payments, selling is often a practical way to catch up before the situation escalates into a tax lien sale, which can ultimately threaten ownership altogether. At closing, any outstanding property tax balance is simply paid off from your proceeds, and the remaining current-year tax bill gets prorated between buyer and seller. Understanding your exact balance owed ahead of time helps you avoid surprises when your final settlement statement is prepared.
Example
Douglas had fallen two years behind on his property taxes after a period of unemployment, owing roughly $4,100 per year on his home in Baton Rouge. He knew the county could eventually pursue a tax lien sale if he let the balance sit much longer, so he decided to sell before that became a real threat. At closing, the title company calculated the full amount owed, $8,200 in back taxes plus roughly $650 in accumulated penalties and interest. Douglas was relieved to see the exact figure spelled out clearly rather than continuing to guess at what he owed. That total, just under $8,850, was paid directly from Douglas's proceeds, and the county released its lien so the sale could record and close on schedule.