Tax Adjustments...What are They?
October 17 2014 Posted by Mary Poburan
TAX ADJUSTMENTS...What are they?
In Alberta we are very fortunate to have minimal costs when buying a home. Part of the approval process includes verifying 1.5% in Closing costs and thankfully apart form Legal fees and Tax adjustments thats all a new Home buyer will be faced with as far as closing costs but what are Tax Adjustments?
In Edmonton and many other municipalities, The tax year is from January -December however taxes are due by June 30th. Depending on when a buyer takes possession they will 'owe' the previous homeowner the amount of tax for the period of time that they will live in the home that year.For example, if a client takes possession on September 1st, they will have to pay 4 months worth of taxes to the seller. In the case of a $3000.00 tax bill this could result in a tax adjustment payment of $1000.00. This money needs to be given to the solicitor upon closing and the collection for next years taxes begins...
Please make sure you understand the tax adjustments you might be facing so that you are prepared!
Mary Poburan
Senior Mortgage Consultant

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