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Purchasing Agricultural Property

Hi,

In an agricultural land purchase before crop season who is responsible for the property taxes on the land? Would it be the buyer or the seller of the property?

I thought that it would be the buyer because they would be reaping the profits from the land. It would be the seller if it was at the end of the year.
  • April 12 2013 - Pipestone
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Answers (3)

If the property was closed on July 4th 2013, the seller (owner) would be responsible for taxes up to that date. As taxes are due in May, the seller would've already paid the 1st payment due for the year and would be responsible for taxes up until closing. After closing the taxes are paid by the buyer.

I believe there is a mechanism in farm land purchase agreements where if there are crops, the seller (owner) may be compensated for the value of the crop if the crop had not yet been harvested. But I'm a city dweller, so that issue is best left to a country dweller.
  • April 13 2013
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I agree that the taxes would be prorated. The crops would be the farmers but the land where they are planted now owned by the buyer. Of course this would all be spelled out in the contracts. In some cases the land is owned by one and the farmer might still hold a lease on it for growing.  
  • April 12 2013
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Profile picture for wetdawgs
Normally property taxes are pro-rated for the period of ownership.  If taxes are paid for a calendar year and property changes hands on July 1, then the previous owner would be responsible for taxes Jan - June, and new owner July to December.

The costs of planting the crop and financial rewards of harvesting the crop are separate from property taxes.  The planting/selling harvest issues should be addressed in the contract.
  • April 12 2013
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