1. Estimating Real Estate Property Taxes
Property taxes are local taxes levied by counties, cities, and school districts to fund services like schools, libraries, road maintenance, and emergency response. Our property tax estimator calculates your annual tax and monthly escrow payments based on market value and effective rates.
2. Assessed Value vs. Fair Market Value
Property tax is calculated on your home’s assessed value, which is determined by local government tax assessors. The assessed value is often a percentage of market value (the assessment ratio), meaning your taxable assessed value can be lower than your home’s appraisal value.
3. Understanding Millage Rates
Local tax rates are often expressed as millage rates (mills), which represents the tax owed per $1,000 of assessed value. For example, a millage rate of 20 mills means you pay $20 for every $1,000 of assessed value (which is a 2% tax rate).
4. Homestead Exemptions and Escrow Accounts
Many jurisdictions offer homestead exemptions that reduce the taxable assessed value of primary residences, protecting homeowners from rising taxes. Most lenders require property taxes to be paid monthly as part of your mortgage payment and held in an escrow account.