Land records · Parcel maps · October 5, 2026
How Is Property Tax Calculated? Mill Rates Explained
How is property tax calculated? Taxable value times the tax rate, often in mills. See the formula, a worked example, and what makes your bill change.
How is property tax calculated? In most of the United States, the formula is: taxable value times the combined tax rate. Taxable value starts with the assessor’s estimate of value, sometimes multiplied by an assessment ratio, minus any exemptions. The tax rate is the sum of rates set by every local taxing body that covers your parcel, such as the county, city, school district, and special districts. Rates are often expressed in mills. This page is general land-records background, not tax advice.
The basic formula
- Market or appraised value: the assessor’s estimate of what the property is worth.
- Assessed value: market value times the assessment ratio, if your state uses one.
- Taxable value: assessed value minus exemptions, such as a homestead exemption.
- Tax: taxable value times the tax rate.
What a mill means
A mill is one-tenth of a cent, or $1 of tax per $1,000 of taxable value. A rate of 25 mills is the same as 2.5 percent. To calculate tax using mills, divide the taxable value by 1,000 and multiply by the mill rate.
Worked example
| Step | Value |
|---|---|
| Market value | $300,000 |
| Assessment ratio | 40 percent |
| Assessed value | $120,000 |
| Homestead exemption | $10,000 |
| Taxable value | $110,000 |
| Combined rate | 60 mills |
| Annual tax | $110,000 ÷ 1,000 x 60 = $6,600 |
Another state might assess at 100 percent of market value with a lower rate. The ratio and rate together matter more than either alone.
Who sets the rates
Each taxing district adopts a budget and a rate, often after public hearings. Your bill may list a dozen or more lines: county general fund, schools, library, fire district, parks, community college, and voter-approved levies or bonds. Some states express rates per $100 of value instead of mills.
Why your bill changes
- Reassessment raises or lowers your value.
- Rate changes from budgets or new levies.
- Exemption changes, such as adding or losing a homestead exemption.
- Assessment caps that limit increases for some owners.
- Improvements like additions or finished basements.
- Special assessments for local projects, which may appear on the same bill.
Checking your numbers
Find your parcel on the county assessor or treasurer website and compare the listed value, exemptions, and rate with your bill. Our guide to looking up property taxes by address shows where to look. If the value seems too high, see how to appeal property taxes; appeal deadlines are usually short.
Bottom line
Property tax is calculated as taxable value times the combined local rate. Taxable value comes from the assessor’s value, any assessment ratio, and exemptions, while the rate is the sum of every district’s levy, often stated in mills. Verify each piece on your county’s site, starting from the Platbookmapper map.
How is property tax calculated FAQ
What is the formula for property tax?
Taxable value times the tax rate. Taxable value is assessed value minus exemptions.
What is a mill rate?
A mill equals $1 of tax per $1,000 of taxable value, or one-tenth of a cent per dollar.
How do I convert mills to a percentage?
Divide the mill rate by 10. For example, 25 mills equals 2.5 percent.
Why did my property tax go up if my value did not change?
Tax rates, new levies, or lost exemptions can raise your bill even when the assessed value stays the same.
Who decides property tax rates?
Local taxing bodies such as counties, cities, school districts, and special districts set rates through budgets and voter-approved levies.