Property Tax Calculator

Property tax is calculated by applying a jurisdiction’s tax rate — called the mill rate — to the assessed value of the property, which is often different from the market value.

Core formula: Annual Property Tax = Assessed Value × Mill Rate ÷ 1,000

Or equivalently: Annual Property Tax = Assessed Value × Effective Tax Rate

Assessed value formula: Assessed Value = Market Value × Assessment Ratio

Where:

• Market Value — the price a willing buyer would pay a willing seller; determined by comparable sales
• Assessment Ratio — the fraction of market value used for tax purposes; varies by jurisdiction (10–100%)
• Mill Rate — the tax rate expressed in mills; 1 mill = $1 of tax per $1,000 of assessed value
• Effective Tax Rate — mill rate ÷ 1,000; easier to apply directly (e.g. 20 mills = 2.0% effective rate)

What each variable means:

• Homestead exemption — a fixed dollar reduction in assessed value for owner-occupied primary residences; common exemption: $25,000–$50,000 reduction
• Senior/disability exemptions — additional reductions for qualifying homeowners; must apply annually in most jurisdictions
• Special assessments — extra levies for local improvements (sewers, road repaving); listed separately on tax bill

US effective property tax rates by state (2024 averages):

• New Jersey: ~2.2% (highest)
• Illinois: ~2.0%
• Texas: ~1.7%
• New York: ~1.4%
• California: ~0.7%
• Hawaii: ~0.3% (lowest)

Worked example: Home market value: $420,000 Assessment ratio: 80% Mill rate: 18.5 mills Homestead exemption: $25,000

Assessed Value = $420,000 × 0.80 = $336,000 Taxable Value = $336,000 − $25,000 = $311,000 Annual Tax = $311,000 × 18.5 ÷ 1,000 = $5,753.50/year Monthly escrow = $5,753.50 ÷ 12 = $479.46/month

To appeal a property tax assessment, you must demonstrate that the assessed value exceeds fair market value — a recent appraisal or comparable sales data from your neighborhood provides the strongest evidence.