What Does It Mean to Pay Property Taxes in Arrears?

While the term “in arrears” often means that something is being paid late or past a due date in financial contexts, this is not necessarily the case, according to Investopedia. Paying property taxes in arrears often simply means that the government body issuing the tax bill does so when the tax period, usually a calendar year or a fiscal year, is over. In this context, “paying property taxes in arrears” simply means that the tax is billed at the end of a year, and it is paid after that period is over rather than being paid up front at the beginning of a calendar or fiscal year.

It is common for states to issue tax bills for in arrears payments rather than requiring prepayment. Each state has its own laws regarding whether payments are due in arrears or not, as reported by Fidelity National Title. Some states, such as Arizona, have a single tax date on which all property owners must pay their taxes. However, many states issue property tax bills in arrears for a period that varies from state to state. For example, as of 2015, Arkansas assesses property taxes in arrears for a fiscal year that spans from March 1 through February 28, while Wisconsin assesses property taxes in arrears for a calendar year.