Interim Tax Bills

David Fuchs • January 20, 2020

Many times when a client decides to build a new home or do a renovation loan that requires approval from the local municipality, they will be subjected to an Interim Tax Bill. Although this is a difficult situation to explain, you should always prepare your clients to receive an additional one-time tax bill in these situations. Interim Taxes are assessed when there is an increase in the assessment on a property which would have taken place before the next tax billing cycle.


The bad news is that the Interim Tax Bill will surprise the client . . . unless they are prepared for it. If you can set the expectation up front and give them the information in advance, you can avoid this. No one is suggesting the clients will be happy when you explain to them that they will receive a separate tax bill. That being said, if you prepare them for it up front, they won’t be nearly as upset about paying the Interim Tax Bill. You also come across as more knowledgeable, and I’m quite sure the clients will appreciate that.

Another question that can arise during a construction purchase or a renovation loan is ‘how much will my new tax amount be’? The truth is that the taxes will be paid based off the assessment amount which will be determined by the local tax assessor upon completion of the work. Usually the most accurate estimate can be obtained by looking up the Common Level Ratio for the county in which the home is located. The Common Level Ratio represents the average ratio between the assessed value and the fair market value (appraised value/sales price) in each particular county. This can vary drastically between counties; but using the Common Level Ratio factor will typically yield the most accurate estimate of what the new property taxes will be, which will also help to figure out what the Interim Tax Bill will be for your client.


For me, the best way to explain an Interim Tax Bill is to give an example. Let’s say you have a client who is closing in August on a new construction loan. In this scenario the school tax bill will have been paid at closing for just about the entire year. Assuming the construction is completed on December 1, there would be an Interim Tax Bill due from December 1, 2019 through July of 2020 based on the new assessed value. The school taxes for the land have already been paid for that year, but the school taxes on the improved value of the property have not been paid. A prorated school tax is needed for about 8 months (December 1 – July 31) since the improved value of the property is only relevant once the improvements have been completed. The same concept applies with the local and county taxes, but those taxes run on a different schedule than the school taxes (typically January 1 – December 31). The date of the closing and the time frame for construction are important pieces of information to have when estimating the Interim Tax Bills.


If the home was completed in October, you would receive an Interim Tax Bill for two months (November and December) for the county and township areas and another Interim Tax Bill for eight months (November – June) for the school tax.

As you can see, if you have a buyer who is doing a construction loan or if you have a past client who is doing an addition to their home, there are many factors to consider. The key is to inform them and prepare them for all of the variables that are coming in their transaction. Utilizing your resources with title companies and lenders will help you come up with the most accurate estimates regarding the taxes that the buyer will pay on the completed property, as well as the Interim Tax Bill they will receive. For buyers considering new construction, this should be a conversation that happens very early on in the process so that a clear expectation is set. As a Realtor, providing this information will show your value and knowledge as you proceed toward a smooth closing!


David Fuchs, Traditions Mortgage 

Facts, opinions and information expressed in the Closing Comments Blog represent the work of the author and are believed to be accurate, but are not guaranteed. The Lancaster County Association of Realtors® is not liable for any potential errors, omissions or outdated information. If errors are noted within a post, please notify the Association. Posts represent the author’s opinion and are not necessarily the opinion of the Association.The body content of your post goes here. To edit this text, click on it and delete this default text and start typing your own or paste your own from a different source.

October 12, 2026
LANCASTER, PA – Lancaster County's housing market continued to show strength in September 2026, with rising home prices, increased inventory, and stronger year-over-year sales activity, according to the latest statistics from Bright MLS. The median sold price reached $370,000, a 4.2% increase from September 2025. A total of 457 homes were sold during the month, up 6.5% from the previous year. Housing inventory also improved, with 779 active listings, an increase of 17.3% compared to September 2025. New listings rose 4.8% to 551 properties, providing buyers with additional opportunities. “Lancaster County continues to demonstrate the strength and stability of our local housing market,” said Christina Diehl, President of the Lancaster County Association of REALTORS® (LCAR). “The increase in available homes is encouraging for buyers, while continued price appreciation reflects the strong demand for housing in our community.” Homes continued to sell quickly, spending an average of just 20 days on the market, compared to 25 days a year earlier. Properties also sold at an average of 103.1% of their original listing price, demonstrating continued competition among buyers. Year-to-date figures remain positive, with closed sales increasing 2.7% and the median sold price rising 4.3% to $365,000. “As we enter the final months of 2026, we remain optimistic about Lancaster County's housing market,” Diehl added. “While increased inventory offers buyers more choices, demand remains strong. Working with a knowledgeable local REALTOR® continues to be an important advantage for both buyers and sellers.” About the Lancaster County Association of REALTORS® The Lancaster County Association of REALTORS® (LCAR) represents real estate professionals throughout Lancaster County and is dedicated to promoting homeownership, protecting private property rights, and supporting professionalism in the real estate industry. 
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