Property Tax Calculator
It turns a property value, assessment ratio and local tax rate into an annual property tax bill, the monthly escrow amount and the effective rate on market value.
Annual property tax
$3,540
Assessed value
$320,000
Taxable value
$295,000
Annual bill
$3,540
Monthly escrow
$295.00
Mill rate
12.0
Effective rate
0.885%
The exemption saves $300 a year. Most exemptions must be applied for and are not granted automatically.
Estimate only, and not tax advice. Assessment practice, exemptions and rates vary by jurisdiction — check your local assessor for the figures that apply to you.
What it calculates
It turns a property value, assessment ratio and local tax rate into an annual property tax bill, the monthly escrow amount and the effective rate on market value.
Why it matters
Property tax is a permanent cost of ownership that never amortizes away, and it is often the difference between two otherwise identical homes being affordable or not.
Who it's for
Home buyers comparing towns, owners checking an assessment, and landlords modelling the carrying cost of a rental.
Formula
- MV
- Market value of the property
- AR
- Assessment ratio — the share of value that is taxed
- E
- Exemptions such as a homestead allowance
- r
- Tax rate, as a percentage or in mills
Worked example
$400,000 home, 80% assessment, 1.2% rate
- 1Assessed value = 400,000 × 80% = $320,000
- 2Taxable value = 320,000 − 25,000 exemption = $295,000
- 3Annual tax = 295,000 × 1.2% = $3,540
$3,540 a year, or $295 a month into escrow
How the property tax calculator works
Most jurisdictions tax an assessed value rather than the market value, applying a ratio that can be well below 100%. Exemptions such as a homestead allowance come off the assessed figure before the rate is applied. Rates are quoted either as a percentage or in mills, where one mill is one dollar per $1,000 of value — so a 1.2% rate is 12 mills. The effective rate, which is the annual bill divided by market value, is the only figure that compares fairly across towns with different assessment practices.
Most jurisdictions tax an assessed value rather than the market value, applying a ratio that can be well below 100%. Exemptions come off that assessed figure before the rate is applied.
The effective rate — the annual bill divided by market value — is the only number that compares fairly between towns, because assessment practices differ so much.
Common mistakes
- Applying the tax rate to market value when the town assesses at a fraction of it.
- Mixing up mills and percent — a factor of ten in either direction.
- Assuming the assessment stays put after a sale; many jurisdictions reassess on transfer.
- Forgetting that exemptions often require an application and are not automatic.
Tips and best practice
- Compare towns on effective rate, not headline rate — assessment ratios differ wildly.
- Check whether a homestead exemption applies to you; it is free money that many owners never claim.
- If a new assessment looks high, appeal deadlines are short and strictly enforced.
Frequently asked questions
How is property tax calculated?
Market value is multiplied by the assessment ratio to give an assessed value, exemptions are subtracted, and the local tax rate is applied to what remains.
What is a mill rate?
One mill is one dollar of tax per $1,000 of assessed value. A rate of 12 mills is the same as 1.2%, so multiply a percentage by ten to get mills.
What is the difference between assessed and market value?
Market value is what the property would sell for. Assessed value is the portion the jurisdiction taxes, often a set percentage of market value.
Is property tax included in my mortgage payment?
Usually. Lenders collect one twelfth of the annual bill each month into an escrow account and pay the tax authority on your behalf when it falls due.
Can I lower my property tax?
You can apply for exemptions you qualify for and appeal an assessment you believe is too high. Both have deadlines that are enforced strictly.
Related calculators
Methodology & trust
- Formula source
- Standard ad valorem assessment practice used by US taxing jurisdictions
- Last updated
- 2026-07-28
- Privacy
- Every calculation runs in your browser. No inputs are sent to a server or stored.