Pre-paid property tax to the builder?

COLUMBUS, OH

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STEPHANIE STOUTE

Buzzer

Pre-paid property tax to the builder?

Does anyone know the procedure for when a builder collects property tax on final registration?

The Uptown Residence closed this week and the builder collected 2012 Property Tax from all unit owner's. Considering it’s only January, and the building was registered December 21st, I doubt they have paid this tax to the City.

Should they be collecting this without a 2012 tax bill issued? Why can’t I just pay the City my portion, and the builder his when the unit get’s assessed?

Canada / General Chit-Chat

MAXIM ZAVET

Buzzer

Yes the builder will estimate the taxes and adjust accordingly even if taxes are not assessed. Tax assessments for a new condominium building could take awhile (sometimes even a couple of years).
Make sure to hold on to your statement of adjustments and compare the builder's estimate of taxes to your actual property taxes. If the builder over estimated, and therefore took too much in their adjustment, they are under a duty to adjust vis-a-vis their undertaking to readjust which should have been delivered to your lawyer. If the opposite is true, then you may be under a duty to readjust and compensate the builder!
Hope that helps!

STEPHANIE STOUTE

Buzzer

Thanks Maxim!
It's good to know this is common practice. To me it seems like it could be a logistical nightmare, especially considering how many years it could take the City to assess and holdbacks that take place if your unit is sold before assessment, etc.
This cost can quite heavily increase closing costs for someone who isn’t expecting it / didn’t read the fine print!