How Do Property Taxes Work with Owner Financing?

Property taxes don't disappear just because a bank isn't involved — someone still has to pay them.

Who Typically Pays

In most owner-financed deals, the buyer is responsible for property taxes, just as they would be with a conventional mortgage.

Spell It Out in the Contract

Your purchase agreement and promissory note should clearly state who pays property taxes, when they're due, and what happens if they go unpaid.

Escrow vs. Direct Payment

Some sellers set up an informal escrow arrangement where a portion of your monthly payment covers taxes; others expect you to pay the county directly.

Bottom Line

Clarify tax responsibility in writing before closing to avoid confusion — or worse, missed payments — down the line.

Learn more about ongoing homeownership costs at ownerfinancedhomesforsale.com.

This article shares general educational information about owner financing and is not legal or financial advice. Consult a licensed real estate attorney or financial professional before entering into any owner financing agreement in your state.