🏡 Property Tax Calculator

Estimate annual property tax from assessed value, mill rate, exemptions, and monthly escrow payment.

Annual Property Tax from Assessed Value

BrainyCalculators editorial insight — unique to this tool

US property tax = assessed value × mill rate (e.g., 1.2% effective in Texas suburbs vs 2%+ in NJ). Indian municipal property tax varies by city — Bengaluru BBMP uses zone × built-up area × rate per sq ft. Assessed value often lags market value; appeals are common after purchase.

When to use this calculator

Use to estimate recurring housing tax burden. For purchase affordability, use House Affordability or Down Payment.

Modeling full home purchase affordability?

This page estimates property tax alone. For maximum home price from income, use the House Affordability Calculator →

Home Value ($)

Tax Rate (%)

Assessment Ratio (%) default 100

—

Annual Tax

—

Monthly Tax

—

Effective Rate

Assessed Value: — = Home Value × Assessment Ratio

Cumulative Tax by Year

Year	Annual Tax	Cumulative Total

Annual Tax at Different Rates

Tax Rate	Annual Tax	Monthly Tax

What is Property Tax?

Property tax is levied on assessed real estate value at a local mill or percentage rate, often paid via monthly escrow with a mortgage.

Use this page to budget ownership carrying costs. Rent affordability covers tenant payments; rental yield measures investor return including tax as an expense.

House affordability can include property tax in monthly housing payment for buyers.

Property Tax Formula

Assessed Value = Home Value × (Assessment Ratio ÷ 100)

Annual Tax = Assessed Value × (Tax Rate ÷ 100)

A mill rate represents $1 of tax per $1,000 of assessed value. To convert: divide the mill rate by 10 to get the equivalent percentage rate. For example, a mill rate of 15 equals a 1.5% tax rate.

How to Use the Property Tax Calculator

1

Enter Your Home Value

Enter the current market value or purchase price of your property. This is the starting point for calculating your assessed value.
2

Choose Rate Format

Select whether your local rate is expressed as a percentage (e.g., 1.2%) or as a mill rate (e.g., 12 mills). Switch the toggle accordingly.
3

Enter Assessment Ratio

Many jurisdictions assess property at a fraction of market value. Enter your local assessment ratio (default is 100%, meaning full value). Check your county assessor's website for this figure.
4

Review Your Tax Estimate

See your annual and monthly tax, effective rate, a 5-year cumulative table, and a side-by-side comparison at common tax rates.

Example Calculation

A home valued at $350,000 with an assessment ratio of 80% and a tax rate of 1.2%:

Assessed Value = $350,000 × 80% = $280,000

Annual Tax = $280,000 × 1.2% = $3,360/year

Monthly Tax = $3,360 ÷ 12 = $280/month

Effective Rate = $3,360 ÷ $350,000 = 0.96%

How the Property Tax Calculator Works

Formula, assumptions, and calculation steps for this real estate tool.

Methodology

Real-estate calculators combine property price, income, rent, tax, mortgage, or expense inputs into affordability and return estimates.

Calculation Steps

Enter property, income, payment, or rent assumptions.
Convert annual values to monthly values where needed.
Apply affordability, yield, tax, or loan formulas.
Show the result with ratios or payment context.

Assumptions and Limits

Market rents, taxes, insurance, and rates can change by location.
Closing costs and local regulations are included only if provided.
Use a real-estate or lending professional for binding decisions.

Frequently Asked Questions

What is property tax?

Property tax is an annual tax levied by local governments (county, city, or school district) on real estate. It is calculated based on the assessed value of your property and the local tax rate. Property taxes fund public services such as schools, roads, fire departments, and emergency services.

What is a mill rate?

A mill rate (or millage rate) is a way of expressing property tax as dollars per $1,000 of assessed value. One mill equals $1 of tax per $1,000. For example, a mill rate of 15 means you pay $15 for every $1,000 of assessed value, which is equivalent to a 1.5% tax rate. Divide a mill rate by 10 to convert it to a percentage.

How is assessed value different from market value?

Market value is what your home would sell for on the open market. Assessed value is what your local tax authority determines your property is worth for taxation purposes — this is often a percentage of market value known as the assessment ratio. If your county uses an 80% assessment ratio, a $400,000 home would have an assessed value of $320,000.

How can I lower my property tax?

You can lower your property tax by (1) filing for available exemptions such as homestead, senior citizen, veteran, or disability exemptions; (2) appealing your assessment if you believe your home is overvalued — most jurisdictions allow formal appeals; (3) reviewing your property card for errors in square footage, bedroom count, or lot size; and (4) monitoring local tax rate changes and attending public hearings.

Real-World Applications

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Home Purchase Budget Planning

Homebuyers calculate expected annual property tax for target properties — adding it to mortgage payments, insurance, and HOA fees to determine total housing cost and confirm affordability before making an offer.

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Commercial Real Estate Investment Analysis

Commercial property investors include property tax as an operating expense in NOI (Net Operating Income) calculations — reducing property tax through assessed value appeals or exemptions directly improves NOI and property value.

📊

Property Tax Appeal Preparation

Property owners use assessed value and mill rate calculations to understand how much they would save from a successful assessment appeal — quantifying the financial benefit before deciding whether to hire a tax attorney or consultant.

🏙️

Municipal Budget Planning

Local governments calculate the property tax revenue generated by different mill rates applied to the total assessed value of all taxable property in the district — setting mill rates to fund the adopted budget while managing taxpayer burden.

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Rental Property Operating Cost Modelling

Landlords and property management companies model property tax as a fixed annual operating cost — including it in rent calculations to ensure that rental income covers all holding costs (tax, insurance, maintenance, mortgage) at the required net yield.

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Tax Escrow Account Estimation

Mortgage servicers calculate monthly property tax escrow contributions by dividing the annual tax bill by 12 — adjusting escrow payments annually after tax bills are received to prevent escrow shortfalls or excessive surpluses.

Common Mistakes

Using market value instead of assessed value in the calculation

Property tax is levied on assessed value — which may differ substantially from market value. Many jurisdictions assess properties at a fixed fraction of market value (the assessment ratio). Using the market value directly in the tax calculation without applying the assessment ratio significantly overstates the tax bill.

Not accounting for homestead and other exemptions

Most jurisdictions offer homestead exemptions (for primary residences), senior citizen exemptions, disability exemptions, and veteran exemptions that reduce the taxable assessed value. Calculating tax without deducting applicable exemptions overstates the actual tax obligation — sometimes by thousands of dollars per year.

Assuming the same property tax rate applies to all property types

Many jurisdictions apply different mill rates to different property classifications — residential, agricultural, commercial, and industrial properties are often taxed at different rates. Using a residential rate for a commercial property (or vice versa) produces an incorrect estimate.

Forgetting that assessments may not reflect current market value

In jurisdictions with infrequent reassessment cycles (some states reassess only every 2–10 years), assessed values may diverge significantly from current market values — particularly after rapid appreciation. Homeowners who bought at peak may be over-assessed relative to current value, making an assessment appeal worthwhile.

Not including special assessments and supplemental tax bills

The base property tax bill may not be the only property tax obligation. Special assessment districts (for roads, sewers, lighting), Mello-Roos bonds (California), and supplemental bills after a change of ownership can add hundreds to thousands of dollars annually to the base property tax. Full holding cost analysis must include all ad valorem and special assessments.

Average Effective Property Tax Rates by US State (Selected)

State	Effective Rate	Annual Tax on $400k Home
New Jersey	2.21%	~$8,840
Illinois	2.07%	~$8,280
New Hampshire	1.93%	~$7,720
Texas	1.60%	~$6,400
California	0.71%	~$2,840
Hawaii	0.27%	~$1,080

References

Lincoln Institute of Land Policy. Significant Features of the Property Tax. lincolninst.edu, 2024.
Tax Foundation. Property Taxes by State. taxfoundation.org, 2024.
National Association of Realtors. Property Tax Data. nar.realtor, 2024.
US Census Bureau. 2022 American Community Survey — Property Tax Data. census.gov, 2023.
WalletHub. Property Taxes by State 2024. wallethub.com, 2024.