This calculator gives estimates for education and planning. It is not investment, tax or legal advice; for decisions about your own situation, talk to a qualified financial professional.
How property tax is figured
In the United States, property taxes are set by counties, cities, school districts and other local bodies, and they fund schools, roads, police and fire services. The bill depends on two things: the taxable value the assessor puts on your home and the total tax rate of every body that taxes it.
The formula
- Assessed value = market value × assessment ratio
- Taxable value = assessed value − exemptions
- Annual tax = taxable value × tax rate, or taxable value × mill rate ÷ 1,000
- Monthly amount = annual tax ÷ 12, the share collected in a mortgage escrow account
The assessment ratio is the share of market value that is taxed. Some states assess at 100% of value, others at a fixed share, such as 10% for homes in Mississippi and Arizona. A mill is one dollar of tax per $1,000 of assessed value, so 25 mills equals a rate of 2.5%.
Example
A home with a market value of $350,000, assessed at 100%, with no exemptions and a combined rate of 1.1%:
- Taxable value: $350,000
- Annual tax: 350,000 × 1.1% = $3,850
- Monthly escrow: $321
Exemptions that lower the bill
- Homestead exemption: most states reduce the taxable value of a primary residence, for example by $50,000 in Florida.
- Senior and disability exemptions or freezes: many counties freeze or reduce taxes for older or disabled owners.
- Veteran exemptions: often larger for veterans with a service-connected disability.
- Assessment caps: some states limit how fast assessed values can rise, such as Proposition 13 in California, which caps annual increases at 2%.
Exemptions usually require an application with the county assessor, often by a set deadline.
Effective tax rates
The effective rate, annual tax ÷ market value, makes places comparable. It averages roughly 1% across the US but ranges from about 0.3% in Hawaii to around 2% in New Jersey and Illinois. When you buy a home, the assessment is often reset to the purchase price, so the seller’s current bill can underestimate yours.
Appealing an assessment
If your assessment looks high compared with similar homes nearby, you can usually appeal it within a short window after the notice is mailed. Gather recent sales of comparable homes and check the assessor’s record for errors in square footage or features.