What does it signify if property taxes are paid in arrears?

When property taxes are paid in arrears, it indicates that the taxes being paid are for the previous year, not the current one or future assessments. This means that the tax payment is made after the tax period has ended, functioning as a settling of outstanding obligations for the time that has already elapsed.

In real estate transactions, understanding the timing of property tax payments is crucial, as it can affect financial obligations, closing costs, and prorations between buyers and sellers. This is important in ensuring clarity around who is responsible for taxes during any given tax year, particularly at the point of closing or transfer of property ownership.