At a Texas closing, property taxes for the current year are usually split by the calendar: the seller pays for the days from January 1 through closing, and the buyer pays for the rest of the year. Because Texas property taxes are generally billed in the fall and due by January 31 of the next year, the seller usually has not paid the current year yet. So the seller gives the buyer a credit for the seller's share, and the buyer pays the whole bill when it comes due, often through escrow. The TREC resale contract sets this up in its proration paragraph (TREC No. 20-19, Paragraph 13).
A tax lien attaches to Texas property on January 1 of each year for that year's taxes (Tax Code 32.01). Bills generally go out in the fall, and taxes become delinquent if not paid before February 1 of the following year, with some exceptions (Tax Code 31.02). A spring or summer closing happens before the bill exists, which is why prorations are often based on an estimate.
The title company calculates the figures, and they appear on the Closing Disclosure as adjustments between buyer and seller (12 CFR 1026.38(j) and (k)).
On the same Closing Disclosure, you may see a credit from the seller for the seller's months, and also a deposit into your new escrow account so the servicer can pay the full bill later. Those are different directions of the same tax year. The credit covers the seller's share. The escrow deposit builds the balance for the bill you will owe. The net is in your cash to close.
The seller's prior-year bill may reflect the seller's homestead exemption, an over-65 ceiling, or the 10 percent homestead cap. Those belong to the seller. Your bill can be higher once the appraisal district values the home without them. See Texas property taxes. Do not treat the proration credit as a preview of your future tax.
Fictional example: a Fort Worth closing happens in late March. The current year's bill is not out, so the title company prorates using an estimate. The seller credits the buyer for January 1 through closing. The buyer's lender collects an escrow deposit so the servicer can pay the full current year bill when it comes due by the end of January next year. When the actual bill arrives, it differs from the estimate, so under Paragraph 13 the parties adjust the proration between themselves, and the buyer's next escrow analysis adjusts the monthly payment.
Who pays which other costs is covered in who pays closing costs in Texas.
If you want your tax proration and escrow deposit estimated before you write an offer, I can build them into your numbers. Book a call, or start an application.
Links checked Oct 21, 2026.
About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.
Equal Housing Opportunity.
Last reviewed: Oct 2026