Property Tax Calculator

Frequently Asked Questions

What is the difference between assessed value and market value?

Market value is what a buyer would pay in an arm's-length transaction. Assessed value is assigned by the local government for tax purposes. In California, assessed value is the purchase price plus up to 2% growth per year (Prop 13).

Can I appeal my property tax assessment?

Yes. Gather recent comparable sales, check for errors in the property record, and file within the deadline (typically 30-90 days). Appeals are free and succeed about 30-40% of the time with solid evidence.

How do property taxes affect my monthly mortgage payment?

Lenders collect 1/12 of the estimated annual tax monthly in escrow and pay the tax authority when due. When taxes increase, your escrow adjusts and raises total monthly PITI.

What is millage rate?

Millage rate expresses the tax rate in mills, where one mill = $1 per $1,000 of assessed value. A millage rate of 15 mills = 1.5% of assessed value. Divide millage by 10 to get the effective rate percentage.

Are property taxes deductible on my federal return?

Yes, as part of the SALT deduction, but capped at $10,000 per year through 2025 for primary residences. Investment property taxes are fully deductible as a business expense without the cap.

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Estimates for informational purposes only.

Important Disclaimer: Estimates for informational purposes only.

This calculator provides estimates for informational purposes only. Results are based on assumptions and may not reflect actual outcomes. Consult qualified professionals in relevant fields before making important decisions based on these results.

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How It Works

Property tax is calculated as: Annual Tax = Assessed Value times Effective Tax Rate divided by 100. Assessed value is often a percentage of market value set by your local assessor - many states assess at 100% of market value, but some assess at a fraction (e.g., California reassesses at purchase price, and Illinois assesses at 33.33% of market value in most counties).

Enter your home's market value and the assessment ratio (default 100%), then select your state for a typical effective rate or enter a custom rate if you know your local millage. The result shows annual, monthly (for escrow planning), and quarterly tax amounts.

Key Metrics

Property tax rates vary dramatically by state:

Highest effective rates: New Jersey (~2.49%), Illinois (~2.27%), New Hampshire (~2.18%), Connecticut (~2.14%). These states often have high public school spending funded through property taxes.

Lowest effective rates: Hawaii (~0.28%), Alabama (~0.40%), Colorado (~0.51%), Nevada (~0.60%). Low rates do not always mean lower absolute tax bills - high values in Hawaii mean bills can still be significant.

National average: Approximately 1.1% of market value. On a $300,000 home, that is about $3,300 per year or $275 per month in escrow.

Tips

Check your actual assessment notice rather than assuming market value equals assessed value - especially in states with assessment caps or fractional assessment systems.

Budget for property tax increases when purchasing - even in states with assessment caps, the cap resets to full market value upon sale.

If your assessed value seems too high, file an appeal. Appeals are free, succeed roughly 30-40% of the time with solid comparable sales evidence, and deadlines are typically 30-90 days after assessment notices are mailed.

For mortgage planning, add monthly property tax to your PITI (principal, interest, taxes, insurance) to get your true total monthly housing cost.

Investment property owners may deduct property taxes as an operating expense. For primary residences, the SALT deduction is capped at $10,000 on federal returns through 2025.

FAQ

What is the difference between assessed value and market value?

Market value is what a willing buyer would pay in an arm's-length transaction. Assessed value is the value your local government assigns for tax purposes. In many states these are equal, but California uses purchase price (plus 2% annual growth max under Prop 13), and other states assess at fractions of market value with their own formulas.

Can I appeal my property tax assessment?

Yes. Most jurisdictions have a formal appeal process. Gather recent comparable sales showing lower values, check for errors in the property record (wrong square footage, bedroom count, lot size), and file within the deadline after your assessment notice is mailed - typically 30 to 90 days. Appeals are free to file and succeed about 30-40% of the time.

How do property taxes affect my monthly mortgage payment?

Lenders typically include property tax in your monthly payment as an escrow item. They collect 1/12 of the estimated annual tax each month and pay the tax authority when the bill is due. When taxes increase, your escrow payment is adjusted, raising your total monthly PITI.

What is millage rate?

Millage rate (or mill levy) expresses the tax rate in mills, where one mill = $1 of tax per $1,000 of assessed value. A millage rate of 15 mills equals 1.5% of assessed value. Some jurisdictions express rates this way; the effective rate percentage (which this calculator uses) is just millage divided by 10.

Are property taxes deductible on my federal return?

Yes, as part of the SALT (state and local taxes) deduction, but the deduction is capped at $10,000 per year ($5,000 for married filing separately) through the 2025 tax year under current law. Investment property taxes are deductible as a business expense without the SALT cap.

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