A tax certificate is a document issued by the Bexar County Tax Assessor-Collector that shows the current status of property taxes on a home. It lists how much is owed, whether taxes have been paid, any delinquent amounts, penalties, and interest. Title companies order tax certificates during a home sale to determine how taxes will be prorated between buyer and seller at closing.
What a Tax Certificate Shows
A tax certificate shows the property's tax account status, including the current year's assessed value, applicable exemptions, tax amounts levied, payments made to date, and any outstanding balances. It also shows whether there are any delinquent taxes from prior years, penalties, interest, or tax liens. The certificate is typically valid for a limited period, often 30 to 60 days, so it must be current at closing.
Why Title Companies Order It
Title companies order a tax certificate as part of the title search process. They need to know the exact tax status to ensure there are no unpaid taxes that could become a lien on the property. Unpaid property taxes can create a title defect that prevents the buyer from obtaining clear title. The certificate also provides the data needed to calculate tax proration at closing, so each party pays their fair share of taxes for the period they owned the home.
How Tax Proration Works
At closing, property taxes are prorated between the buyer and seller. The seller pays taxes for the portion of the year they owned the home, and the buyer pays for the remainder. For example, if the annual taxes are $6,000 and the seller owned the home for 200 days of the year, the seller's share is about $3,287. The buyer credits that amount at closing. The actual calculation uses the tax certificate data and the closing date.