Your attorney should guide what credits are due at the closing. In Cook County, Taxes are paid one year in arrears. This means that you should be receiving a credit from the seller at closing for taxes which will be due while you own the home, for time that they were in possession of title. In other words, you will have to pay the 2nd installment of 2007 taxes at the end of this year, but they owe you the money to cover those taxes because you did not own the home in 2007.

Similarly, it is customary for taxes to be prorated to the day of closing. Typically the contract will specify the percentage that the seller agrees to prorate the taxes at. Unless my clients request otherwise, we prorate taxes at 110% of the most recent ascertainable taxes, assuming the taxes for the following year will be higher than the current. The tax bill for the 2007 first installment should be the most recent ascertainable tax bill at this time.

The equation may look like the following:

Actual Taxes x Prorated Percentage / 365 = Daily Prorated Tax amount

Multiply this number by the number of days due between closing and the last installment period, and you have the credit you are owed. There a couple of ways to calculate this, so check with your attorney for advice here.

It would have been prudent to make sure that they were disclosing the most relevant tax bill they had, but it could be an honest error. Discuss with your attorney and make sure you are getting a credit you are comfortable with. Keep in mind, credits when you buy are usually cost when you sell, so this money is very important!

Oak Park is a tremendous community, congrats on the purchase.

If you will be the owner of the home when the second installment is due, and this part of the tax bill covers the time you will be in the house, then you should be the one who pays. However, if these are taxes paid in arrears, then the tax pro-ration should be as of the day of closing. Ask your Realtor and call the closing agent also. Most closing paperwork includes an agreement to be signed by the buyer and seller if taxes are paid in arrears and the tax amount changes, then the buyer or seller will pay the additional amount that they owe, or the buyer will reimburse the seller for taxes overpaid. Your Realtor and your closing agent should be able to explain this to you in detail for your particular situation. Hope this helps you.