How is property tax calculated?
Property tax = taxable assessed value × tax rate. Taxable assessed value is the home's assessed value (often a percentage of market value, called the assessment ratio) minus any exemptions (e.g. homestead). The tax rate is usually expressed as a mill rate — dollars owed per $1,000 of assessed value. Example: a $350,000 home assessed at 80% of market value = $280,000 assessed value; minus a $25,000 homestead exemption = $255,000 taxable; at a 20 mill rate (2%), tax = $255,000 × 0.02 = $5,100/year.
What is a mill rate and how do I convert it to a percentage?
A mill rate (or millage rate) is the tax owed per $1,000 of assessed property value. 1 mill = $1 per $1,000 = 0.1%. To convert mills to a percentage, divide by 10: a 25 mill rate = 2.5%. Mill rates are set by local governments (counties, cities, school districts) and combined into one total rate. The US national average effective property tax rate is around 0.9–1.1% of home value, but varies enormously — from under 0.3% in Hawaii to over 2.2% in New Jersey and Illinois.
What is a homestead exemption and how much can it save?
A homestead exemption reduces the taxable assessed value of a primary residence, lowering the property tax bill. Amounts vary widely by state: Florida offers up to $50,000 off assessed value; Texas offers a $100,000 exemption for school district taxes; some states (like Georgia) use a percentage-based exemption instead. Many jurisdictions also offer additional exemptions for seniors, veterans, and disabled homeowners — these can stack with the standard homestead exemption to meaningfully cut your bill.
Why is my assessed value different from my home's market value?
Most US counties don't tax 100% of market value — they apply an assessment ratio first. Common ratios: 100% in many states, but as low as 10–40% in others (e.g. some Mississippi and South Carolina property classes use ~10%, residential in Tennessee uses 25%). Assessments are also typically based on a periodic appraisal cycle (every 1–5 years), so assessed value often lags behind fast-moving market prices — this is why two equally-priced homes can have very different tax bills if assessed in different years.
How often does property tax get reassessed, and can I appeal it?
Reassessment frequency varies: annually in some counties, every 2–5 years in others, and only on sale/renovation in places with caps like California's Proposition 13 (which limits assessment increases to 2%/year until the property changes hands). If you believe your assessed value is too high relative to comparable homes, most jurisdictions allow a formal appeal with the county assessor's office — typically within 30–60 days of your assessment notice, supported by comparable sales or an independent appraisal.