Proration
The division of a recurring expense such as property tax, insurance, or HOA dues between buyer and seller at closing based on the closing date.
Proration splits an ongoing expense fairly between the buyer and the seller based on how long each owns the property during the period. Property taxes, insurance, and association dues are commonly prorated at closing.
Because Florida property taxes are paid in arrears, a seller usually owes the buyer for the part of the year the seller owned before closing, which appears as a debit to the seller and a credit to the buyer.
On the exam
Exam trap
Tested in
Computations and Closing (6% of the exam)
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This definition is Florida real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.