Property tax is a local tax, so the same house can carry very different bills a few miles apart. Every bill follows the same three-step logic, though: assessed value, minus exemptions, times the rate. This calculator walks through those steps and converts between the ways local governments publish their rates — percent, mills, or dollars per $100 of value.
How to use the property tax calculator
- Enter the market value of the property — a recent appraisal or the assessor’s market value.
- Enter the assessment ratio: the share of market value that is taxable. It is 100% in many states but lower in others.
- Subtract any exemptions such as a homestead, senior or veteran exemption.
- Enter the tax rate and choose its format: percent, mills, dollars per $100, or dollars per $1,000. Use the combined rate for all the districts on your bill.
- Add any credits or rebates that come off the bill itself.
Property tax formula
Converting rate formats
| Format | Means | 1.2% written this way |
|---|---|---|
| Percent | Tax per $100 of value, as a percent | 1.2% |
| Mills | Tax per $1,000 of value | 12 mills |
| Per $100 | Dollars of tax per $100 | $1.20 |
| Decimal | Fraction of taxable value | 0.012 |
Worked example
A home has a market value of $350,000 in a county that assesses at 100%. The owner qualifies for a $25,000 homestead exemption and the combined rate is 1.2%.
Assessed value = 350,000 × 100% = $350,000
Taxable value = 350,000 − 25,000 = $325,000
Property tax = 325,000 × 0.012 = $3,900 a year, or $325 a month in escrow
Effective rate = 3,900 ÷ 350,000 = 1.114%
If the same rate were quoted as 12 mills or $1.20 per $100, the bill would be identical. The exemption saves 25,000 × 0.012 = $300 a year.
What drives property tax bills
Reassessments
Counties revalue property on cycles ranging from every year to every several years. When values jump, many jurisdictions lower the rate so total collections rise more slowly, but individual bills still shift. Some states cap how fast the assessed value of a homestead can grow.
Overlapping districts
A typical bill combines county, municipal and school district levies, plus fire, library, water or community-development districts. The school levy is often the largest single piece.
Paying through escrow
Most mortgage lenders collect one-twelfth of the estimated annual tax with each payment and pay the bill on your behalf. The mortgage calculator adds that amount to your monthly payment, and the house affordability calculator includes it in your debt-to-income ratio.
Deductibility
If you itemize on your federal return, property tax counts toward the state and local tax (SALT) deduction, which is capped. See the federal income tax calculator to compare itemizing with the standard deduction.
This is an estimate. Your county assessor and tax collector determine the official assessed value, exemptions and bill.
Frequently asked questions
How is property tax calculated?
The assessor sets an assessed value, usually market value times the local assessment ratio. Exemptions are subtracted to get taxable value, which is multiplied by the combined tax rate of every taxing district — county, city, school district and special districts.
What is a mill?
A mill is one-tenth of a cent, so a rate of 1 mill means $1 of tax per $1,000 of taxable value. A 12-mill rate equals 1.2%, or $1.20 per $100.
What is the effective property tax rate?
It is the annual tax divided by the property's market value. It lets you compare places with different assessment ratios and exemptions. US effective rates range from under 0.5% in some states to more than 2% in others.
What is a homestead exemption?
Many states reduce the taxable value of an owner-occupied primary residence by a fixed amount or a percentage. You usually have to apply once with the county assessor; it does not apply to rentals or second homes.
Why is my bill different from the estimate?
Bills can include special assessments, fees, voter-approved levies or credits that are not part of the general rate, and the assessor's value may differ from the price you paid. Check your county's latest bill or rate sheet.