You’ll still pay property taxes and utilities if you sell your home, no matter when your sale closes. There’s a common misconception that if you sell before your taxes are due, the new owner pays the whole bill. Another common misconception is the property tax billing cycle. The property tax billing cycle is based on the calendar year, not the due date. Municipalities of Metro Vancouver collect property tax in the middle of the year for the entire calendar year. The idea behind this billing cycle is to pay your taxes in the middle of the year. This seems fair but makes it confusing for many homesellers and homebuyers when calculating taxes.
When completing your sale, your lawyer or notary will calculate the exact property tax amount you owe or are owed. You’ll get a partial refund from the buyer if you’ve already paid your bill, or you’ll credit the buyer if the bill is due. Property taxes are divided based on the number of days of the year the buyer and seller owns the property. This prorated amount is then split up between each party. It’s important to note your lawyer or notary won’t be paying the property taxes on your behalf. They’ll provide you with the adjustment, and whoever is the owner at the due date will be responsible for paying the property taxes.
Another point to remember is even if you intend on selling within the calendar year, you should still claim your home owner grant (if applicable). Your home owner grant will also be prorated along with your property taxes.
