How to use the property tax calculator
- Enter the market value of the property in dollars.
- Set the assessment ratio. Use 100 if your jurisdiction taxes full market value, or enter the local percentage (often 40 to 80).
- Choose whether your tax rate is quoted as a percent or in mills.
- Enter the tax rate. For example, 1.2 for 1.2% or 12 for 12 mills.
- Read the calculated assessed value, annual property tax and monthly escrow amount below.
How property tax is calculated
The formula behind this property tax calculator has three steps. First, multiply the market value by the assessment ratio to get the assessed value. Second, apply the tax rate to that assessed value. Third, divide by twelve for the monthly escrow figure.
For example, a home worth $300,000 in a county with an 80% assessment ratio and a 1.5% tax rate:
- Assessed value: $300,000 x 0.80 = $240,000
- Annual tax: $240,000 x 0.015 = $3,600
- Monthly escrow: $3,600 / 12 = $300.00
If the rate is given in mills, one mill equals one dollar per $1,000 of assessed value, or 0.001 in decimal form. A rate of 15 mills on a $240,000 assessed value yields $240,000 x 0.015 = $3,600.
Understanding mills versus percent
Tax rates are published differently depending on the state or county. Some jurisdictions quote the rate as a percentage of assessed value, while others use mills. One mill is one-tenth of a cent, meaning $1 of tax for every $1,000 of assessed value.
| Mills | Equivalent percent | Decimal multiplier |
|---|---|---|
| 1 | 0.1% | 0.001 |
| 10 | 1.0% | 0.010 |
| 15 | 1.5% | 0.015 |
| 25 | 2.5% | 0.025 |
| 50 | 5.0% | 0.050 |
To convert mills to a percentage, divide by 10. To convert a percentage to mills, multiply by 10. Selecting the correct rate type in the calculator ensures the math applies the right divisor.
What is an assessment ratio?
The assessment ratio is the fraction of a property's market value that the taxing authority uses as the taxable base. If your home's fair market value is $400,000 and the local ratio is 70%, the assessed value is $280,000. The tax rate is then applied only to that $280,000.
Ratios vary widely. Some jurisdictions assess at 100% of market value, while others use a fraction of it. Agricultural land, historic properties and owner-occupied homes sometimes qualify for lower ratios or exemptions that reduce the assessed value further. Check your county assessor's website or your most recent tax bill to find the exact ratio for your property class.
Property tax and your mortgage escrow
Lenders typically collect property tax payments through an escrow account bundled into your total housing payment. Each month, you pay one-twelfth of the estimated annual tax along with your principal, interest and insurance. The lender holds these funds and pays the tax bill when it comes due.
Because assessments and rates can change annually, lenders perform an escrow analysis each year. If taxes rise, your required deposit increases, which may raise your overall payment. Using a property tax estimate helps buyers anticipate future costs before closing. For broader loan planning, pair this tool with a mortgage calculator to see how taxes affect your total housing expense.
Common mistakes to avoid
The most frequent error is applying the tax rate to the full market value when the jurisdiction actually uses a lower assessment ratio. Always verify whether the rate you found online applies to market value or assessed value.
Another mistake is confusing mills with percent. Entering 15 as a percent instead of 15 mills will overstate your tax by a factor of ten. Finally, remember that special assessments for sewers, sidewalks or school bonds are often levied separately and added on top of the general property tax rate. This calculator handles the general rate; add any special district charges manually to your final estimate.
Rates and ratios are inputs you supply; this tool does not know your local rules. This tool is for general information only and is not financial, tax or legal advice.
Method and sources
Worked example: a $300,000 home, assessed at 100%, taxed at 1.2%: assessed value $300,000, annual tax $3,600, monthly escrow $300.
Method: tax = market value x assessment ratio x rate, with mills divided by 1,000 and percent by 100. Every county sets its own ratio, rate and exemptions (homestead, senior, veteran), so use the figures from your assessor's notice; the tool does not look up local rates, and special assessments and appeals are not modelled.
Worked examples
| Example | Input | Result |
|---|---|---|
| Average US home at 1.2% | Market value ($): 300000; Assessment ratio (%): 100; Rate type: percent; Tax rate: 1.2 | Assessed value: $300,000; Effective rate: 1.2%; Annual property tax: $3,600; Monthly escrow: $300 |
| 80% ratio, 15 mills | Market value ($): 250000; Assessment ratio (%): 80; Rate type: mills; Tax rate: 15 | Assessed value: $200,000; Effective rate: 1.5%; Annual property tax: $3,000; Monthly escrow: $250 |
| High-tax area | Market value ($): 500000; Assessment ratio (%): 100; Rate type: percent; Tax rate: 2.5 | Assessed value: $500,000; Effective rate: 2.5%; Annual property tax: $12,500; Monthly escrow: $1,041.67 |
| Low-tax area | Market value ($): 150000; Assessment ratio (%): 60; Rate type: percent; Tax rate: 0.7 | Assessed value: $90,000; Effective rate: 0.7%; Annual property tax: $630; Monthly escrow: $52.50 |
FAQ
How do I find my local property tax rate?
Your county assessor or treasurer publishes the current rate, usually on their website or your annual tax bill. Rates may be listed as a percentage or in mills.
What is the difference between market value and assessed value?
Market value is what a buyer would pay for the property. Assessed value is the portion of market value the government uses to calculate your tax, determined by multiplying market value by the assessment ratio.
Are property taxes deductible?
In the United States, state and local property taxes may be deductible on federal returns if you itemize, subject to a cap on state and local tax deductions that has changed over time. Ask a tax professional or check current IRS guidance for your situation.
Why does my escrow payment change every year?
Lenders review your escrow account annually. If the county raises the tax rate or reassesses your property at a higher value, the required monthly escrow deposit increases to cover the new bill.
Does this calculator include special assessments?
No. Special assessments for infrastructure projects or school bonds are separate line items. Add them to the result from this property tax calculator for a complete estimate.
Can I use this for commercial property?
Yes, but commercial properties often have different assessment ratios and tax rates than residential ones. Enter the values specific to your commercial parcel.
Where do I get my local mill rate or percent rate?
Your county assessor or tax collector publishes it, and it is printed on your annual tax bill. Rates are often split between school, county and city levies, so add them if the bill lists them separately.