The basic formula for property tax
Property tax is calculated by multiplying your home's assessed value by the tax rate set by your local government. The formula is straightforward: Assessed Value × Tax Rate = Annual Property Tax. The assessed value is not what you paid for the house or what it would sell for today — it is a value assigned by your county assessor's office, usually lower than market value. The tax rate is expressed as a percentage or as a dollar amount per $1,000 of assessed value, and it varies by county, city, and school district.
Your property tax bill arrives once or twice a year, depending on where you live. The amount you owe is determined by these two numbers alone. Understanding how each one is calculated helps you know whether your bill is reasonable and what to expect when your home's value changes.
Key Takeaways
- Your assessed value is determined by your county assessor and is typically lower than your home's market value or purchase price.
- Tax rates are set by local governments and vary significantly by county, city, and school district — there is no single national rate.
- You can find your assessed value and tax rate on your property tax bill, your county assessor's website, or by calling the assessor's office directly.
- Your assessed value may be reassessed every one to five years depending on your state, which can cause your tax bill to rise or fall.
- If you believe your assessed value is too high, most counties allow you to file a formal challenge called an appeal or grievance.
How assessed value is determined
The assessed value starts with your county assessor's office, which is a government department responsible for valuing all property in the county. Assessors use several methods to arrive at a value: they may compare your home to similar homes that recently sold nearby, estimate the cost to rebuild your house from scratch, or use income data if your property generates rental revenue. The assessor does not visit every home every year — many counties reassess on a cycle of three to five years, or only when a property changes hands.
When you buy a home, the sale price often triggers a reassessment. The assessor may use your purchase price as a starting point, though they are not required to set the assessed value equal to what you paid. Some states have laws that cap how much the assessed value can increase in a single year, even if your home's market value jumps. California, for example, limits increases to 2 percent per year under Proposition 13, while other states reassess at full market value annually. Check your state's reassessment rules to understand when your assessed value might change.
You can find your home's assessed value on your property tax bill, on your county assessor's website (usually searchable by address or parcel number), or by calling the assessor's office. The bill also lists the tax rate and shows the calculation: assessed value times tax rate equals what you owe.
Understanding tax rates and how they are set
Tax rates are set by local governments — your county, city, school district, and sometimes special districts like fire or water authorities — and they are expressed in different ways depending on where you live. Some areas show the rate as a percentage (for example, 1.2 percent of assessed value). Others express it as a dollar amount per $1,000 of assessed value (for example, $12 per $1,000). A few states use a "mill rate," where one mill equals $1 per $1,000 of value, so a 12-mill rate is the same as $12 per $1,000.
Tax rates vary dramatically by location. A home with an assessed value of $300,000 might owe $3,000 per year in one county and $6,000 per year in another, depending entirely on local tax rates. School districts often make up the largest portion of your bill — sometimes 40 to 60 percent — because schools are funded largely through property tax. Your tax bill is the sum of rates from every taxing body that has jurisdiction over your property.
Tax rates are public information and are usually published by your county assessor or county treasurer's office. You can find them on government websites or by calling the assessor's office. If you are comparing neighborhoods or counties, ask for the combined rate that applies to residential property, since rates may differ for commercial or agricultural land.
Step-by-step calculation example
Here is how the calculation works in practice. Suppose your home's assessed value is $250,000 and your county's combined tax rate is 1.0 percent (which means $10 per $1,000 of assessed value).
| Step | Calculation | Result |
| 1. Start with assessed value | $250,000 | $250,000 |
| 2. Multiply by tax rate | $250,000 × 0.01 | $2,500 |
| 3. Annual property tax | — | $2,500 |
If your county expresses the rate as $10 per $1,000, the math is slightly different but the answer is the same: divide your assessed value by 1,000, then multiply by the rate. ($250,000 ÷ 1,000) × $10 = $2,500. Your property tax bill for the year is $2,500. If your county bills twice a year, you would receive two bills of $1,250 each.
When your assessed value changes — because your home was reassessed or because you made major improvements — your tax bill changes proportionally. If your assessed value rises to $275,000 and the rate stays at 1.0 percent, your new annual bill is $2,750. If the rate increases because the school district raises its levy, your bill rises even if your assessed value stays the same.
What happens when your home's value changes
Your property tax bill can change for two reasons: your assessed value changes, or the tax rate changes. When you make a major home improvement — adding a room, replacing the roof, installing a pool — the assessor may increase your assessed value, which raises your tax bill. Some improvements are not reassessed when ready; the assessor may wait until the next scheduled reassessment cycle. Check your county's rules on what triggers a reassessment.
Tax rates also change when local governments adjust their budgets. If your school district needs more funding, it may raise its tax rate, which increases everyone's bill in that district. These rate changes are public and are usually announced before they take effect. Your county treasurer or assessor's office can tell you whether rates are scheduled to change in the coming year.
If your home's market value drops significantly — because the neighborhood declined or the housing market fell — your assessed value may not drop automatically. You would need to file a formal challenge, called an appeal or grievance depending on your state, to request a lower assessment. The important date to file is usually 30 to 60 days after you receive your tax bill, so act quickly if you believe your assessment is too high.
How to find your assessed value and tax rate
Your property tax bill is the easiest place to start. It shows your assessed value, the tax rate (or rates, if multiple taxing bodies are involved), and the calculation. If you have lost your bill, you can find this information online through your county assessor's website, which usually has a searchable database by address or parcel number. Some counties also offer a mobile app or phone line where you can look up your property.
If the website is not clear or you cannot find your property, call your county assessor's office directly. They can tell you your current assessed value, explain how it was calculated, and describe when the next reassessment is scheduled. They can also explain your county's tax rate structure and point you to the school district and other taxing bodies that affect your bill.
Your county treasurer's office handles billing and payment, so if you have questions about when your bill is due or how to pay, contact them. The assessor's office values property; the treasurer's office collects the tax. Both are public offices and both answer questions from homeowners.
Challenging your assessed value if you think it is too high
If you believe your assessed value is incorrect, you have the right to challenge it. The process is called an appeal, grievance, or assessment review depending on your state. You must file within a specific window — usually 30 to 60 days after receiving your tax bill — so check your bill for the important date and the office to contact.
To file a challenge, you typically need to submit a form (available from your assessor's office or website) and provide evidence that your assessment is wrong. Evidence might include a recent appraisal showing a lower value, sales prices of comparable homes in your area, or documentation of damage or defects that lower your home's value. Some counties allow you to file online; others require a paper form or an in-person meeting.
The assessor's office will review your evidence and either agree to lower your assessment or deny your request. If you disagree with their decision, you may have the right to appeal to a county board or to small claims court, depending on your state. The rules vary widely, so ask your assessor's office what the next step is if your initial challenge is denied.
Frequently Asked Questions
Is my assessed value the same as my home's market value?
No. Assessed value is typically lower than market value and is used only for tax purposes. Your home might be worth $400,000 on the open market but have an assessed value of $300,000. Some states cap how much assessed value can increase each year, which widens the gap over time. Your county assessor can explain the relationship between the two in your area.
Why did my property tax bill go up if I did not make any changes to my house?
Your bill can rise if the tax rate increased, if your assessed value was reassessed upward, or both. School districts and other local governments raise tax rates to fund budgets. Your assessed value may also increase on a regular cycle — every three to five years in many counties — even if your home has not changed. Check your bill to see whether the increase came from a higher assessed value or a higher tax rate.
Can I lower my property tax by lowering my home's assessed value?
You can challenge your assessed value if you believe it is too high, but you cannot straightforward request a lower value without evidence. You would need to show that your home is worth less than the assessor says — through a recent appraisal, comparable sales, or documentation of defects. A successful challenge lowers your assessed value and your tax bill proportionally.
How often is my assessed value updated?
This varies by state and county. Some areas reassess every year; others do it every three to five years. Some states reassess only when a property changes hands. Check your county assessor's website or call their office to find out the reassessment cycle in your area and when your property is scheduled to be reassessed next.
What is the difference between assessed value and appraised value?
Appraised value is what a professional appraiser estimates your home is worth, usually for a mortgage or insurance purpose. Assessed value is what your county assessor determines for tax purposes. They are often different numbers. An appraisal is typically closer to market value, while assessed value may be lower due to state caps on increases or the assessor's own valuation method.