Property tax starts with your home's assessed value, multiplied by your local tax rate

Property tax is calculated using a straightforward formula: assessed value × tax rate = property tax owed. The assessed value is what your local assessor decides your property is worth for tax purposes — not the price you paid or what it would sell for today. The tax rate is set by your county, city, or school district and is usually expressed as a percentage or as dollars per $1,000 of assessed value. The result is the annual amount you owe.

The catch is that assessed value and market value are often different. A home worth $400,000 on the open market might be assessed at $350,000 in one county and $420,000 in another, depending on local assessment practices and when the last full revaluation happened. This is why two identical houses in different counties can have very different tax bills.

Key Takeaways

  • Your property tax bill equals your home's assessed value (set by the county assessor) multiplied by the local tax rate (set by your county, city, or school district).
  • Assessed value is not the same as market value; assessors use sales data, income approaches, or cost approaches to estimate what your property is worth for tax purposes.
  • Tax rates vary widely by location and are usually expressed as a percentage of assessed value or as dollars per $1,000 of assessed value.
  • You can find your assessed value on your property tax bill, the assessor's website, or by visiting the assessor's office in person.
  • If you believe your assessed value is too high, most counties allow you to file a formal challenge called an assessment appeal or tax assessment protest.

Finding your assessed value

Your assessed value appears on your property tax bill, which arrives once or twice a year depending on your county. If you do not have a recent bill, you can look it up online through your county assessor's website. Most counties now publish searchable databases where you enter your address or parcel number and see the assessed value, recent sales data used in the assessment, and sometimes the calculation method.

If the online database is not available or unclear, you can visit the assessor's office in person or call them. Bring your address or parcel number (found on your deed or tax bill). The assessor's staff can show you the assessment card for your property, which lists the assessed value, the date of the last assessment, and sometimes the reasoning behind it.

Understanding how assessed value is determined

Assessors use three main approaches to set assessed value, and different counties rely on different ones. The sales comparison approach looks at recent sales of similar homes in your area and adjusts for differences in size, condition, and features. If three comparable homes sold for $380,000, $390,000, and $400,000 in the past year, your home might be assessed at $390,000. This method works well in active real estate markets where sales happen regularly.

The cost approach estimates what it would cost to rebuild your home from scratch, then subtracts depreciation for age and wear. It is used more often for newer homes or in areas where few sales occur. The income approach is used mainly for rental properties and commercial buildings; it estimates value based on the income the property generates.

Most counties reassess property every three to five years, though some do it annually. When a reassessment happens, the assessor may use recent sales data, send an inspector to your home, or use both. If you have made major improvements — a new roof, an addition, a pool — the assessed value may increase after the next reassessment.

How tax rates are set and expressed

Tax rates are set by local governments: your county, city, school district, and sometimes special districts like fire or water authorities. Each body sets its own rate based on its budget and the total assessed value of all property in its jurisdiction. The combined rate is what you actually pay.

Rates are expressed in two ways. Some counties show a percentage — for example, 1.2% of assessed value. Others use mills or dollars per $1,000 — for example, 12 mills means $12 per $1,000 of assessed value, which equals 1.2%. A few counties use a different format, so check your tax bill or assessor's website to see which your county uses.

Tax rates vary dramatically by location. Some counties charge less than 0.5% of assessed value; others charge 2% or more. A home assessed at $300,000 might owe $1,500 per year in one county and $6,000 per year in another. This is one reason property taxes are often the largest difference in cost of living between regions.

Working through a calculation example

Suppose your home is assessed at $350,000 and your county's combined tax rate is 1.1% of assessed value. The calculation is: $350,000 × 0.011 = $3,850 per year. If your county uses mills instead and the rate is 11 mills per $1,000, the calculation is: ($350,000 ÷ $1,000) × 11 = 350 × 11 = $3,850 per year. Both methods give the same answer.

If you pay your property tax in two installments (common in many counties), you would owe roughly $1,925 each time. Some counties allow you to pay monthly if you escrow through your mortgage lender, meaning the lender collects a portion of the tax with each mortgage payment and pays the county on your behalf.

What happens if you disagree with your assessed value

If you believe your assessed value is too high, you can file a formal challenge. The process and important date vary by county, but most allow you to file an assessment appeal, tax assessment protest, or property tax appeal — the name depends on your state. The important date is usually 30 to 45 days after you receive your tax bill, though some counties allow longer.

To file an appeal, you typically submit a form to the assessor's office or a county board of appeals, along with evidence that your assessed value is wrong. Evidence might include a recent appraisal, a professional market analysis, photos of damage or deferred maintenance, or sales data for comparable homes that sold for less. You may also be able to present your case in person at a hearing.

If the assessor or appeals board agrees with you, your assessed value is lowered and your tax bill is reduced. If they disagree, you can usually appeal further to a state tax court, though this is expensive and most people do not pursue it. Check your county assessor's website for the appeal important date and process specific to your location.

Exemptions and special assessments that change your bill

Some property owners pay less tax because of exemptions. Homestead exemptions, available in many states, reduce the assessed value for your primary residence. Senior exemptions, disability exemptions, and veteran exemptions are common in some states. These exemptions lower your assessed value before the tax rate is applied, so they reduce your bill directly.

Special assessments are different: they are additional charges added to your bill for specific local improvements like a new road, sewer line, or streetlights. They are calculated separately from regular property tax and are based on the benefit to your property, not its value. A property near a new sewer line might owe a special assessment; a property far away might not, even in the same neighborhood.

Frequently Asked Questions

Is my assessed value the same as what I paid for my house?

No. Assessed value is what the assessor estimates your property is worth for tax purposes, which may be higher or lower than your purchase price. If you bought your home years ago, the assessed value has likely increased. If you bought recently and the market has fallen, the assessed value might still be based on older sales data and be higher than what you paid.

Can my property tax bill go down if my home loses value?

Yes, but only at the next reassessment. If your home's market value drops significantly — because of neighborhood decline, a nearby nuisance, or major damage — the assessed value may be lowered when the assessor updates it. You can also file an appeal if you believe the current assessed value is too high compared to recent sales of similar homes.

Why do I see different numbers on my tax bill?

Your tax bill may show the assessed value, the tax rate, the calculated tax, any exemptions, special assessments, and penalties or interest if you paid late. It may also show what portion goes to the county, city, school district, and other local bodies. Read the bill line by line or call the assessor's office if a number is unclear.

What if I think my home was assessed wrong because of an error in the description?

Contact your county assessor's office and ask them to review the assessment card for your property. If the square footage, number of bedrooms, lot size, or other details are wrong, the assessor may correct them and recalculate the assessed value. Errors are common and are often fixed quickly once reported.

How often does my assessed value change?

Most counties reassess every three to five years, though some do it annually. Your assessed value can also change if you make major improvements to your home, file a successful appeal, or if a reassessment happens to use newer sales data. Check your county assessor's website to learn the reassessment schedule in your area.