October 31 isn’t just Halloween. In Washington real estate, it is also an important date for property taxes—and if you have a transaction closing around that time, those taxes can affect what your buyer or seller sees on their settlement statement.
So, what should a real estate broker know?
First, Why Does October 31 Matter?
In Washington, property taxes are generally paid in two installments:
- First half: due April 30
- Second half: due October 31
In Kitsap County, payments must be paid or postmarked by the applicable due date. That makes late October and early November an especially important time to determine whether the second-half taxes have already been paid.
What Happens When a Property Sells?
Here’s where clients can get confused. Property taxes don’t simply “belong” to whoever owns the property when the tax bill arrives. In a typical real estate transaction, taxes are addressed through the closing process so the buyer and seller are each allocated their appropriate share according to the purchase and sale agreement and closing instructions. Depending on the timing of the closing and whether the taxes have already been paid, you may see a tax payment, credit, debit or proration reflected on the settlement statement.
That’s why two transactions closing only a few weeks apart can show property taxes differently.
A Simple Example
Imagine a seller closes in October before the second-half property taxes have been paid. The escrow team must account for the taxes as part of preparing the transaction for closing. Now imagine another seller closing shortly afterward who has already paid the second-half taxes.
Same county. Same tax due date. Different circumstances. And potentially a different-looking settlement statement.
This is one reason brokers should avoid trying to calculate a client’s exact closing figures themselves. A rough estimate may be helpful, but the final numbers should come from the escrow team handling the transaction.
A Good Broker Question to Ask
As you approach a late-October or early-November closing, ask your escrow team: “Have the second-half property taxes been paid, and how are they being reflected on the settlement statement?” That one question can help you prepare your client before they see their final figures.
Don’t Forget About Delinquent Taxes
If taxes from an earlier period remain unpaid, that’s a different issue.
Unpaid property taxes can affect title and may need to be addressed before the transaction can close. This is another reason ordering title early matters—especially if you know there may be complications with the property or seller. You don’t need to be the tax expert but knowing when to ask the question can make you look like an expert to your client.
For transactions closing around October 31: Ask early. Review the settlement statement. And if something doesn’t make sense, call your escrow team before trying to explain the numbers to your client.
A five-minute conversation before signing can prevent a much longer conversation at the signing table.
This article is intended for general educational purposes and is not tax or legal advice. Specific transactions may be handled differently depending on the purchase and sale agreement, closing instructions and circumstances of the property.
