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Florida proration questions split a cost between buyer and seller based on ownership days. For Florida property taxes, the key rule is that taxes are paid in arrears, so the seller usually credits the buyer for the seller's unpaid share through the day of closing. Use the 365-day method unless the question gives a different method. The setup matters more than the arithmetic: identify the item, decide whether it was paid in arrears or in advance, count the seller's days, then assign the credit to the correct side.

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Worked examples
365
Day-count method used in this guide
1 rule
In-arrears property taxes mean seller credits buyer

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The Reason Proration Trips Up Florida Candidates

Proration itself is not complicated. You are splitting a cost between the buyer and seller based on how much of the year each party owned the property. The math is division and multiplication. Nothing harder than what a calculator can do in two steps.

The reason students miss proration questions on the Florida exam is not the math. It is the direction. Florida property taxes are paid in arrears, which means the tax bill for the current year is not due until the following year. That single fact changes who owes whom at closing, and students who learned proration from a national textbook or a generic prep tool can get the direction backwards.

Here is the mistake in one sentence: most students calculate the proration correctly and then credit it to the wrong party. They give the seller a credit when the seller should be debited, or they charge the buyer for taxes the seller already owes. On a question worth one point, the direction error turns a correct calculation into a wrong answer.

This post teaches proration the way Florida candidates need to think about it. Every example uses a 365-day method unless the facts say otherwise, accounts for Florida's in-arrears tax system, and walks through each step so you can see where the money goes and why.

The short version: proration splits a cost between buyer and seller based on ownership days. In Florida, property taxes are paid in arrears. At closing, the seller has lived in the property for part of the current tax year but has not yet paid those taxes. The seller owes the buyer a credit for the seller's share of the unpaid taxes. The formula is annual cost divided by 365 for the daily rate, then daily rate times the number of seller days. The direction is seller credits buyer for unpaid in-arrears taxes.

The best way to use this guide is to read the direction rule first, then work the examples without looking at the answer. If you need the formula in a broader math set, keep the Florida real estate exam math formulas guide open next to this page.

What This Post Covers

Why Florida Proration Is Different From Other States

In most states, property taxes are paid in advance. The homeowner pays the tax for the upcoming year at the beginning of that year. At closing, the seller has already paid taxes for the full year, so the buyer owes the seller a credit for the portion of the year the buyer will own the property.

Florida is the opposite. Property taxes are paid in arrears. The tax bill for the current year arrives in November and is due by March 31 of the following year. This means at the time of closing, the seller has been living in the property for months without having paid the current year's taxes.

The direction flips:

Tax System Who Has Already Paid Who Owes at Closing Direction
Paid in advance (most states) Seller has pre-paid Buyer owes seller for unused portion Buyer credits seller
Paid in arrears (Florida) Neither party has paid yet Seller owes for days they occupied Seller credits buyer

If you learned proration from a national textbook, your instinct is to credit the seller. On the Florida exam, you credit the buyer. That is the single most important fact in this entire post.

The Florida Tax Calendar

Event Date
Tax year begins January 1
Tax year ends December 31
Tax bills mailed November 1
Discount period (4%) November
Discount period (3%) December
Discount period (2%) January
Discount period (1%) February
Taxes due (no discount) March 31
Taxes delinquent April 1

At a typical closing in, say, June, the current year's taxes have not been billed yet (bills go out in November) and certainly have not been paid. The seller has occupied the property from January 1 through the closing date and owes their share of the annual tax. That amount is credited to the buyer at closing so the buyer can pay the full tax bill when it arrives in November.

The 365-Day Method (Step by Step)

This guide uses the 365-day method, also called the actual-day method, because it is the cleanest way to learn Florida property-tax proration. Some questions may specify a 360-day method or a 12-month method. If the question gives a method, the stated method controls.

The Formula

Step 1: Calculate the daily rate. Annual cost / 365 = daily rate

Step 2: Count the seller's days of ownership. Count from January 1 through the day of closing, inclusive or exclusive depending on the closing convention stated in the question. If the question tells you the seller owns the day of closing, include that day in the seller's count.

Step 3: Calculate the seller's share. Daily rate x seller's days = seller's share

Step 4: Determine the direction (credit/debit). For in-arrears items (property taxes): the seller's share is credited to the buyer (debited from the seller). For pre-paid items (insurance, HOA dues paid in advance): the buyer's share is credited to the seller.

The Direction Rule: Who Credits Whom

This is the concept that turns correct calculations into correct answers. Memorize this table:

Item Payment Timing At Closing Direction
Property taxes (Florida) Paid in arrears Seller has NOT paid Seller credits buyer
Prepaid insurance Paid in advance Seller HAS paid for full year Buyer credits seller (for unused months)
HOA dues (paid in advance) Paid in advance Seller HAS paid for current period Buyer credits seller (for remaining days)
HOA dues (paid in arrears) Paid in arrears Seller has NOT paid Seller credits buyer
Rent (tenant has paid current month) Paid in advance Seller HAS collected Seller credits buyer (for buyer's portion of the month)

The rule is consistent: whoever has the money (or the obligation to pay) that belongs to the other party, credits the other party. In arrears means the seller owes. In advance means the seller is owed.

Drill the direction

The daily-rate formula is not the hard part. The credit direction is.

Try a free Florida question after this section, then come back to the worked examples. Pass Florida uses original scenarios, not copied exam questions, so you can practice the pattern without relying on leaked or fake material.

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Worked Example 1: Basic Property Tax Proration

Facts: Closing date is July 15. Annual property taxes are $4,380. Taxes are paid in arrears. The day of closing belongs to the seller. Use a 365-day year.

Step 1: Daily rate $4,380 / 365 = $12.00 per day

Step 2: Seller's days January 1 through July 15 = 196 days (January 31 + February 28 + March 31 + April 30 + May 31 + June 30 + July 15 = 196)

Step 3: Seller's share $12.00 x 196 = $2,352.00

Step 4: Direction Taxes are in arrears. Seller has not paid. Seller credits buyer $2,352.00.

Answer: Seller is debited $2,352.00. Buyer is credited $2,352.00.

Worked Example 2: Mid-Year Closing With Odd Numbers

Facts: Closing date is September 22. Annual property taxes are $5,475. Taxes are paid in arrears. Day of closing belongs to the seller. Use a 365-day year.

Step 1: Daily rate $5,475 / 365 = $15.00 per day

Step 2: Seller's days January 1 through September 22 = 265 days (31 + 28 + 31 + 30 + 31 + 30 + 31 + 31 + 22 = 265)

Step 3: Seller's share $15.00 x 265 = $3,975.00

Step 4: Direction In arrears. Seller credits buyer $3,975.00.

Answer: Seller is debited $3,975.00. Buyer is credited $3,975.00.

Counting tip for the exam: Memorize the cumulative day counts for each month-end:

Month End Cumulative Days
January 31 31
February 28 59
March 31 90
April 30 120
May 31 151
June 30 181
July 31 212
August 31 243
September 30 273
October 31 304
November 30 334
December 31 365

For September 22: cumulative through August 31 is 243, plus 22 days in September = 265.

Worked Example 3: Closing After Taxes Have Been Paid

Facts: Closing date is February 10. The seller paid the previous year's property taxes in full ($3,650) in November. The current year's taxes are estimated at $3,650 (same amount). Day of closing belongs to the seller. Use a 365-day year.

Step 1: The previous year's taxes are already paid. No proration needed for those.

Step 2: For the current year, taxes are in arrears and not yet due. The seller has occupied the property from January 1 through February 10 = 41 days.

Step 3: Daily rate for current year $3,650 / 365 = $10.00 per day

Step 4: Seller's share of current year taxes $10.00 x 41 = $410.00

Direction: Seller credits buyer $410.00 for the seller's share of current year taxes that have not been paid yet.

Answer: Seller is debited $410.00. Buyer is credited $410.00.

The trap: Some students think that because the seller already paid the previous year's taxes, no proration is needed. But the question is about the current year's taxes, which are a separate, unpaid obligation in the arrears system.

Worked Example 4: Proration With Homestead Exemption

Facts: Closing date is August 1. The property has a homestead exemption. Assessed value is $200,000. Total millage rate is 20 mills (8 mills school, 12 mills non-school). Day of closing belongs to the seller. Use a 365-day year.

Step 1: Calculate the annual tax (with homestead split)

School taxable value: $200,000 minus $25,000 = $175,000 School tax: $175,000 x 0.008 = $1,400

Non-school taxable value: $200,000 minus $50,000 = $150,000 Non-school tax: $150,000 x 0.012 = $1,800

Total annual tax: $1,400 + $1,800 = $3,200

Step 2: Daily rate $3,200 / 365 = $8.767 per day (round to nearest cent at the end)

Step 3: Seller's days January 1 through August 1 = 213 days (31 + 28 + 31 + 30 + 31 + 30 + 31 + 1 = 213)

Step 4: Seller's share $8.767 x 213 = $1,867.37 (rounded)

Direction: In arrears. Seller credits buyer $1,867.37.

Why this question is harder: It combines the homestead exemption school/non-school split with the proration calculation. You must calculate the correct annual tax first, then prorate. Students who apply the full $50,000 exemption to all taxes get a different annual tax ($200,000 minus $50,000 = $150,000 x 0.020 = $3,000) and a different proration ($3,000 / 365 x 213 = $1,750.68). Both $1,867.37 and $1,750.68 will be among the answer choices.

Worked Example 5: Insurance Proration

Facts: The seller purchased a 1-year hazard insurance policy for $1,825 on March 1. Closing date is October 15. The buyer is assuming the seller's insurance policy. Day of closing belongs to the seller. Use a 365-day year.

Step 1: The insurance policy runs from March 1 through the following February 28.

Step 2: The seller has used the policy from March 1 through October 15 = 229 days. (March 31 + April 30 + May 31 + June 30 + July 31 + August 31 + September 30 + October 1-15 = 229)

Step 3: Remaining days on the policy: 365 minus 229 = 136 days. This is the buyer's portion.

Step 4: Daily rate $1,825 / 365 = $5.00 per day

Step 5: Buyer owes seller for unused insurance $5.00 x 136 = $680.00

Direction: Insurance was paid in advance by the seller. The buyer is assuming the remaining coverage. Buyer credits seller $680.00.

Key difference from tax proration: The direction flips because insurance is pre-paid, not in arrears. The seller already paid for the full year. The buyer owes the seller for the unused portion.

Worked Example 6: HOA Dues Proration

Facts: The quarterly HOA dues are $900, paid in advance on January 1, April 1, July 1, and October 1. Closing date is August 20. Day of closing belongs to the seller.

Step 1: The current quarter runs from July 1 through September 30 (92 days). The seller paid $900 on July 1 for this quarter.

Step 2: Daily rate for the quarter $900 / 92 = $9.783 per day

Step 3: Seller's days in the current quarter July 1 through August 20 = 51 days (31 + 20)

Step 4: Buyer's days in the current quarter 92 minus 51 = 41 days

Step 5: Buyer owes seller for buyer's portion $9.783 x 41 = $401.10 (rounded)

Direction: HOA dues were paid in advance by the seller. Buyer credits seller $401.10.

Worked Example 7: Rent Proration

Facts: The property being sold is a rental unit. The tenant has paid September rent of $1,500. Closing date is September 12. Day of closing belongs to the seller.

Step 1: September has 30 days. The seller owns days 1 through 12 (12 days). The buyer owns days 13 through 30 (18 days).

Step 2: Daily rent $1,500 / 30 = $50.00 per day

Step 3: Buyer's share of September rent $50.00 x 18 = $900.00

Direction: The seller has already collected the full month's rent. The buyer is entitled to rent for the days they own the property. Seller credits buyer $900.00.

Worked Example 8: Full Exam-Style Problem

Facts: A property closes on May 18. Annual property taxes are $6,205. The seller prepaid a 1-year insurance policy for $2,190 starting January 1. Monthly HOA dues of $350 are paid in arrears. Day of closing belongs to the seller. Use a 365-day year. What are the proration adjustments at closing?

Property Tax (in arrears):

  • Daily rate: $6,205 / 365 = $17.00 per day
  • Seller's days: January 1 through May 18 = 138 days (31 + 28 + 31 + 30 + 18)
  • Seller's share: $17.00 x 138 = $2,346.00
  • Direction: Seller credits buyer $2,346.00

Insurance (prepaid by seller):

  • Daily rate: $2,190 / 365 = $6.00 per day
  • Seller's days used: January 1 through May 18 = 138 days
  • Remaining days: 365 minus 138 = 227 days (buyer's portion)
  • Buyer owes: $6.00 x 227 = $1,362.00
  • Direction: Buyer credits seller $1,362.00

HOA Dues (in arrears):

  • May has 31 days. Seller owns days 1 through 18 (18 days).
  • Daily rate: $350 / 31 = $11.29 per day
  • Seller's share of May dues: $11.29 x 18 = $203.22
  • Direction: Seller credits buyer $203.22

Summary:

Item Seller Debit Buyer Credit Seller Credit Buyer Debit
Property tax $2,346.00 $2,346.00
Insurance $1,362.00 $1,362.00
HOA dues $203.22 $203.22

This is the complexity level the exam can reach. It combines three different proration items with different payment timings (arrears and advance) in a single question. Students who understand the direction rule handle each item independently and get the answer. Students who apply one direction to all three items get two of the three wrong.

The 4 Traps in Proration Questions

Trap 1: Reversing the Direction for In-Arrears Taxes

This is the number one proration mistake. Students calculate the correct dollar amount and credit it to the seller instead of the buyer. In Florida, unpaid in-arrears taxes are the seller's obligation. The seller credits the buyer. Always.

Trap 2: Using 360 Days Instead of 365

Some national textbooks teach the banker's year (360 days, 30 days per month). Other practice questions use actual days. The safest rule is simple: use the day-count method the question gives you. If the question says "use a 365-day year," use 365. If the question says "use a 360-day year" or "use the banker's year," use 360.

Trap 3: Miscounting the Day of Closing

Many exam-style proration questions state who owns the day of closing. If the seller owns the day of closing and closing is July 15, the seller's days run through and including July 15. The buyer's first day is July 16. One day of miscounting at $12 per day does not sound significant, but when two answer choices differ by exactly $12, that one-day error is the difference between the right and wrong answer.

Trap 4: Prorating the Wrong Year's Taxes

If a question mentions that the previous year's taxes were $4,000 and the current year's estimated taxes are $4,200, make sure you prorate the correct year. At closing, you prorate the current year's taxes (the ones that have not been paid yet in the arrears system), not the previous year's taxes (which are either already paid or are a separate line item on the closing statement).

Quick Reference Formula Card

Screenshot this for exam day review.

Step Formula Example
1. Daily rate Annual cost / 365 $4,380 / 365 = $12.00
2. Seller's days Count January 1 through closing date (inclusive) Jan 1 to July 15 = 196 days
3. Seller's share Daily rate x seller's days $12.00 x 196 = $2,352.00
4. Direction (arrears) Seller credits buyer Seller debited $2,352, buyer credited $2,352
4. Direction (advance) Buyer credits seller for unused portion Buyer debited, seller credited

Day of closing: Follow the question's stated convention. Year method: Follow the question's stated day-count method. Florida taxes: Paid in arrears. For unpaid current-year taxes, seller credits buyer.

Monthly cumulative day count: Jan 31 | Feb 59 | Mar 90 | Apr 120 | May 151 | Jun 181 | Jul 212 | Aug 243 | Sep 273 | Oct 304 | Nov 334 | Dec 365

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Sources & Methodology

This guide is written for Florida sales associate exam preparation. The examples use a 365-day method and state that the seller owns the day of closing so students can see the mechanics clearly. When a question specifies a different day-count method or closing-day convention, the stated method controls.

The examples are intentionally split across unpaid property taxes, prepaid expenses, HOA dues, rent, homestead exemption, and full exam-style scenarios because proration errors usually come from direction, not arithmetic. The guide teaches the direction decision first, then the daily-rate calculation.

This post does not reproduce actual DBPR or Pearson VUE exam questions. The examples are original practice scenarios written to match the public content outline and the proration patterns candidates need to recognize on test day.

Reviewed May 2026. Florida tax rules, exam procedures, and candidate instructions can change. Verify current exam rules through DBPR and Pearson VUE, and verify tax rules through the Florida Department of Revenue or current Florida statutes.

  • Pearson VUE, Florida Real Estate testing page
  • Florida Department of Business and Professional Regulation and Florida Real Estate Commission sales associate exam content outline
  • Florida Department of Revenue Property Tax Oversight guidance on Florida property tax billing and collection timing
  • Florida Statutes, Chapter 197, tax collections, sales, and liens
  • Florida Statutes, F.S. 196.031, homestead exemption
  • Pass Florida internal question-bank review of proration miss patterns

Frequently Asked Questions

Are Florida property taxes paid in advance or in arrears?

In arrears. The property tax bill for the current calendar year (January 1 through December 31) is mailed in November and is due by March 31 of the following year. This means at any closing during the year, the current year's taxes have not been paid. The seller owes their share, credited to the buyer at closing.

Does the Florida exam use the 365-day method or the 360-day method?

Use the method stated in the question. If the question says to use a 365-day year, use actual days. If it says to use a 360-day year or "banker's year," use 360. The worked examples in this guide use 365 days so you can practice actual-day counting.

Who owns the day of closing for proration purposes?

Follow the convention stated in the question. If the question says the seller owns the day of closing, the seller's days run from January 1 through and including the closing date. The buyer's first day of ownership is the day after closing.

How do I know whether to credit the buyer or the seller?

Use the direction rule: if the item is paid in arrears (like Florida property taxes), the seller owes money and credits the buyer. If the item is paid in advance (like a prepaid insurance policy), the seller has already paid and the buyer credits the seller for the unused portion. The key question is: has the money already been paid? If not (arrears), seller credits buyer. If yes (advance), buyer credits seller.

What if the question gives me last year's taxes and this year's estimated taxes?

Prorate the current year's estimated taxes, not last year's. The current year is the one where the seller has an unpaid obligation (in the arrears system). Previous year taxes are either already paid or are a separate line item on the closing statement. If the question does not mention estimated taxes and only gives a tax amount, assume that amount applies to the current year.

How many proration questions are on the Florida real estate exam?

Proration can appear directly as a math question or indirectly through closing-statement scenarios and documentary stamp and closing cost calculations. It is one of the formula families covered in the Florida real estate exam math guide.

Can proration appear in an EXCEPT/NOT question?

Yes. For example: "All of the following are debited to the seller at closing EXCEPT..." with proration-related items among the choices. In that format, you need to know both the calculation and the direction to evaluate each choice correctly. The EXCEPT/NOT question guide covers the technique for handling this format.

Is proration the hardest math topic on the Florida exam?

Students report it as the most confusing math topic, primarily because of the in-arrears direction reversal. The actual arithmetic is simpler than commission splits through two brokerages or homestead exemption calculations with the school tax split. The difficulty is conceptual (who owes whom), not mathematical.

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