Timing is Everything: When to Pay Property Taxes When Selling in Regina

Selling Your Regina Home: Navigating Property Tax Payments for a Smooth Closing

Following our discussion last week on the various expenses involved in selling your Regina home, this week we're focusing on a specific, yet often confusing, aspect: property tax payments. Understanding the timing of these payments when you're selling can prevent unnecessary complications and ensure a seamless closing process.

When Should Sellers Pay Property Taxes?

In Regina, property taxes are generally due by June 30th of each year. However, many homeowners opt for the City of Regina's Tax Installment Payment Plan Service (TIPPS), which allows for monthly payments. When you're selling your home, the timing of your property tax payments relative to your possession date becomes crucial.

The Golden Rule: Avoid Advance Payments (Unless on TIPPS or Due Before Possession)

It is generally advisable for sellers to wait on making any direct, voluntary advance payments to the City for property taxes, unless those payments are part of your regular TIPPS contributions or if the taxes are due before your scheduled possession date.

Here's why:

• Complications with Adjustments: Your real estate lawyer will handle the property tax adjustments at the time of closing. This involves prorating the annual taxes between you and the buyer based on the possession date. If you make an unscheduled advance payment, it can unnecessarily complicate these calculations and lead to confusion or delays.

• TIPPS is Different: If you are enrolled in TIPPS, continue making your regular monthly payments. Your lawyer will account for these payments when calculating the final adjustments. The goal is to ensure that you, as the seller, are only responsible for the portion of the taxes up to the possession date, and the buyer takes over from there.

• Taxes Due Before Possession: If the annual property tax deadline (June 30th) falls before your possession date, and you are not on TIPPS, you should pay the taxes as usual. Your lawyer will then ensure you are reimbursed by the buyer for their share of the taxes from the possession date to the end of the year.

How Your Lawyer Handles It:

Your real estate lawyer plays a critical role in managing property tax adjustments. When you meet with them, they will:

• Review Your Tax Status: They will confirm whether you are on TIPPS, if you have any outstanding tax balances, or if you have overpaid.
• Calculate Adjustments: Based on your possession date and the buyer's tax arrangements, they will calculate the precise amount of tax adjustment needed.
• Ensure Proper Payment/Reimbursement: This adjustment will be reflected in the final statement of adjustments, ensuring that the correct amount is either paid by you or reimbursed to you from the sale proceeds.

By allowing your lawyer to manage these adjustments, you minimize the risk of errors and ensure that the property tax portion of your sale is handled efficiently and correctly. It's one less thing for you to worry about during what can be a busy and stressful time.

Have questions about selling your home in Regina? Contact Optimum Realty Regina today!