Property Tax Calculator
Calculate your annual and monthly property tax payments based on home value and local tax rate. Understand how property taxes affect your total housing costs.
Check your county's tax rate online or on your current tax bill
Understanding Property Taxes
Property taxes are a significant ongoing cost of homeownership, often adding hundreds or even thousands of dollars to your monthly housing payment. Understanding how property taxes work and what you'll owe is crucial when budgeting for a home purchase.
How Property Taxes Are Calculated
Property taxes are calculated using a simple formula: Assessed Value × Tax Rate = Annual Property Tax
Assessed Value
Your county assessor determines your home's assessed value, which may differ from market value. Some states assess at 100% of market value, while others use a percentage (e.g., 80%). Reassessments typically occur when you buy a home or make major improvements.
Tax Rate (Mill Rate)
The tax rate is set by local governments (county, city, school district) and expressed as a percentage or mills (1 mill = 0.1%). Rates vary dramatically by location, from 0.28% in Hawaii to 2.49% in New Jersey.
What Property Taxes Pay For
Property taxes fund essential local services:
- •Public Schools: Typically 40-60% of property tax revenue
- •Police and Fire: Emergency services and public safety
- •Roads and Infrastructure: Maintenance and improvements
- •Parks and Recreation: Public spaces and programs
- •Libraries: Public library systems
- •Local Government: Administrative costs and services
Property Tax Exemptions and Deductions
Many homeowners qualify for exemptions that reduce their property tax bill:
Homestead Exemption
Reduces taxable value for primary residences. Amount varies by state, typically $25,000-$50,000 off assessed value.
Senior Citizen Exemption
Additional exemptions for homeowners over 65. Some states freeze property taxes at a certain age.
Veteran Exemption
Disabled veterans may qualify for partial or full property tax exemptions depending on disability rating.
Federal Tax Deduction
You can deduct up to $10,000 in state and local taxes (SALT), including property taxes, on your federal tax return (for joint filers).
Frequently Asked Questions
How are property taxes calculated?
Property taxes are calculated by multiplying your home's assessed value by the local tax rate. The assessed value is determined by your county assessor and may differ from market value. Tax rates vary significantly by location, typically ranging from 0.5% to 2.5% of home value annually.
What is the average property tax rate in the US?
The average property tax rate in the US is approximately 1.1% of home value annually. However, rates vary dramatically by state and locality. New Jersey has the highest average rate at 2.49%, while Hawaii has the lowest at 0.28%.
Can property taxes increase over time?
Yes, property taxes can increase due to rising home values, changes in tax rates, or new local levies. Many states have caps on annual increases (e.g., California's Prop 13 limits increases to 2% per year). Reassessments typically occur when you buy a home or make major improvements.
Are property taxes included in my mortgage payment?
Most lenders require property taxes to be escrowed and included in your monthly mortgage payment. The lender collects 1/12 of your annual tax bill each month and pays the taxes on your behalf when due. This ensures taxes are paid on time and protects the lender's interest in the property.