Real Estate Tax Calculator

Property tax = Assessed Value × Tax Rate. Most jurisdictions express rates as mills (dollars per $1,000 of value) or as a percentage. A 25-mill rate equals 2.5%, so a $400,000 assessed value yields $10,000 annual tax.

Assessed value may differ from market value — many states assess at a fraction of market value (e.g., Georgia assesses at 40%, so a $400,000 home is assessed at $160,000).

Homestead exemptions reduce the taxable amount:

• Florida exempts $50,000
• Texas exempts $100,000 (as of 2024)
• California's Prop 13 caps assessed value increases at 2% per year regardless of market appreciation

Tax rates are set locally by combining levies from multiple taxing authorities — typically county, city, school district, and special districts (fire, library, parks) — with school taxes comprising 40-60% of the total.

Effective property tax rates (annual tax as percentage of home value) vary dramatically: New Jersey 2.23%, Illinois 2.07%, Connecticut 2.00%, New Hampshire 1.86%, and Texas 1.68% are the highest. Hawaii 0.27%, Alabama 0.39%, Colorado 0.51%, Louisiana 0.53%, and South Carolina 0.56% are the lowest.

However, low-rate states may have higher home values (Hawaii) or rely more heavily on other taxes (sales, income) to compensate. Texas has no state income tax but high property taxes; New Hampshire has no sales or income tax but the 4th-highest property tax rate.

For homebuyers, the effective rate matters more than the nominal rate — a 1.5% rate on a $400,000 home costs $6,000/year ($500/month), which directly affects mortgage qualification because lenders include taxes in the debt-to-income ratio.

Homeowners can protest their assessment if they believe the assessed value exceeds fair market value — approximately 30-40% of appeals succeed, with average reductions of 7-10%.

To build a case:

• gather comparable sales (3-5 similar homes sold recently for less than your assessed value)
• document property deficiencies that assessors may have missed (deferred maintenance, environmental issues, proximity to negative features)
• review the property record card for factual errors (wrong square footage, incorrect number of bedrooms/bathrooms, missing condition notes)

File appeals during the protest window (typically 30-60 days after assessment notices are mailed, varying by jurisdiction). Even a 5% reduction on a $400,000 assessment at a 2% tax rate saves $400 per year — compounding over a decade of ownership.

Many property tax consultants work on contingency, taking 25-40% of first-year savings.

Property tax equals your home's taxable assessed value multiplied by the local tax (mill) rate. The assessor:

• sets a market value
• applies an assessment ratio to get assessed value
• subtracts exemptions to reach taxable value
• multiplies by the mill rate

For a $400,000 home assessed at 100% with a 1.2% rate, the annual tax is $4,800. Because each county sets its own ratio and rate, two identical homes in different counties can owe very different amounts.

The assessment ratio is the percentage of market value that is actually taxed. Some jurisdictions assess at 100% of market value; others assess at 10-50%, then apply a higher rate to compensate.

Taxable value is assessed value minus any exemptions. Understanding the ratio matters because a low-looking rate on a high assessment ratio can cost more than a high rate on a low ratio.

Always compare the effective tax rate — annual tax divided by market value — not the headline mill rate.

A mill is one-tenth of a cent, so one mill equals $1 of tax per $1,000 of taxable value; a 20-mill rate is 2%.

Local governments set millage to fund schools, county services, and municipal budgets, which is why rates rise when budgets grow.

The effective tax rate — total tax paid divided by the home's market value — is the cleanest way to compare tax burdens across areas because it folds the assessment ratio and every levy into one number.

A homestead exemption reduces the taxable value of an owner-occupied primary residence, lowering the tax owed. Amounts and rules vary widely by state — some exempt a flat dollar amount, others a percentage, and many offer extra relief for seniors, veterans, and people with disabilities.

Because you usually must apply and re-qualify, unclaimed exemptions are a common source of overpayment. Check your assessor's homestead rules the year you buy and whenever your circumstances change.

Effective property tax rates vary dramatically across the US. According to Tax Foundation data, New Jersey, Illinois, and New Hampshire sit among the highest (often above 1.8%), while Hawaii, Alabama, and Colorado are among the lowest (well under 0.5%).

High-rate states often pair lower home prices with heavier local reliance on property tax for schools. When comparing markets, weigh the annual tax burden alongside the purchase price, since a low rate on an expensive home can still exceed a high rate on a cheaper one.

Assessors periodically update your home's value, on a schedule that ranges from annual to every several years depending on the jurisdiction.

Reassessments can jump after:

• a sale (some states reset to the purchase price)
• a major renovation
• a rising market

A few states, such as California under Proposition 13, cap annual assessment growth, which can create large gaps between long-time owners and recent buyers. Knowing your area's reassessment cycle helps you anticipate tax increases before they arrive.

Property taxes on your primary and second homes are deductible on a federal return if you itemize, but the IRS state-and-local-tax (SALT) deduction is capped at $10,000 combined with state income and sales taxes under the 2017 Tax Cuts and Jobs Act.

For homeowners in high-tax states, this cap limits the benefit, so many take the standard deduction instead. Track your paid property tax with your escrow statements and consult IRS guidance on Schedule A before claiming.

The most common ways owners overpay are:

• failing to claim a homestead or senior exemption
• not reviewing the assessor's valuation for errors (wrong square footage, lot size, or condition)
• missing the appeal deadline

Assessments are frequently inflated, and a successful appeal with recent comparable sales can lower your bill for years. Review your assessment notice every cycle, verify the property details, and appeal promptly when the assessed value exceeds what comparable homes actually sell for.