Property Tax Calculator
Estimate your annual and monthly property taxes using assessed value, mill rate, and exemptions. See how much you save with a homestead exemption.
How Property Taxes Work
Property taxes are annual levies imposed by local governments — counties, municipalities, and school districts — on real estate. For most homeowners, property taxes represent the largest recurring cost of ownership after the mortgage itself. For real estate investors, accurately forecasting property taxes is essential to calculating net operating income (NOI), cap rates, and cash-on-cash returns.
Property taxes fund public services including schools, roads, fire departments, and local government operations. The amount you owe each year is calculated from three key variables: your property's assessed value, the assessment ratio used by your jurisdiction, and the local mill rate (tax rate).
📋 Assessed Value
Your county assessor determines the assessed value of your property — often a percentage of its market value (the assessment ratio). Most states assess at 70–100% of market value, though some states like California and Louisiana use lower ratios. Assessed values are updated annually or every few years during reassessment cycles.
🏛️ Mill Rate (Millage Rate)
The mill rate is the tax rate applied to your assessed value. One mill equals $1 of tax per $1,000 of assessed value. A rate of 20 mills on a $300,000 assessed value yields $6,000 in annual taxes. Mill rates are set by local taxing authorities and typically range from 5 mills (low-tax areas) to 35+ mills (high-tax cities like Detroit or Newark).
🎟️ Exemptions & Deductions
Most states offer exemptions that reduce your taxable value. The homestead exemption — available for your primary residence — is the most common, ranging from $5,000 in some states to $50,000+ in Florida and Texas. Additional exemptions exist for seniors, veterans, disabled persons, agricultural use, and nonprofit properties.
📐 The Formula
Annual Tax = (Market Value × Assessment Ratio − Exemptions) × (Mill Rate ÷ 1,000)
Property Tax Rates by State (2026 Reference)
Effective property tax rates (annual tax ÷ market value) vary from under 0.3% in Hawaii to over 2.2% in New Jersey. Use these as benchmarks when evaluating investment markets.
New Jersey~2.23% · ~22 mills
Illinois~2.05% · ~20 mills
New Hampshire~1.93% · ~19 mills
Connecticut~1.73% · ~17 mills
Wisconsin~1.61% · ~16 mills
Texas~1.60% · ~18 mills
Ohio~1.56% · ~16 mills
Michigan~1.54% · ~15 mills
Pennsylvania~1.49% · ~15 mills
New York~1.40% · ~14 mills
Iowa~1.43% · ~14 mills
Kansas~1.37% · ~14 mills
Vermont~1.73% · ~17 mills
Indiana~0.84% · ~8 mills
Virginia~0.82% · ~8 mills
North Carolina~0.78% · ~8 mills
Georgia~0.83% · ~8 mills
Florida~0.89% · ~10 mills
Tennessee~0.64% · ~6 mills
South Carolina~0.57% · ~6 mills
Arizona~0.63% · ~6 mills
Colorado~0.55% · ~5 mills
California~0.75% · ~8 mills
Nevada~0.59% · ~6 mills
Alabama~0.40% · ~4 mills
West Virginia~0.58% · ~6 mills
Louisiana~0.55% · ~6 mills
Hawaii~0.28% · ~3 mills
National Average~1.08% · ~10 mills
*Effective rates are approximate statewide averages for 2025. Actual rates vary by county and municipality. Sources: Tax Foundation, Lincoln Institute of Land Policy.
Frequently Asked Questions — Property Taxes
What is a mill rate? +
A mill rate (or millage rate) is the amount of tax per $1,000 of assessed property value. One mill = $1 per $1,000 of assessed value. A mill rate of 20 means you pay $20 for every $1,000 in assessed value — so a property assessed at $300,000 with a 20 mill rate pays $6,000/year. Mill rates are set by local governments and typically include separate levies for the county, municipality, school district, and special districts stacked together.
What is a homestead exemption? +
A homestead exemption reduces the taxable assessed value of your primary residence. For example, a $25,000 homestead exemption on a $300,000 assessed property means you only pay taxes on $275,000. Florida offers up to $50,000. Texas offers $100,000 for school district taxes. Many states also cap annual assessment increases for homestead properties — California's Prop 13 limits increases to 2%/year. Availability and amounts vary by state and county; apply through your county property appraiser's office.
What is an assessment ratio and how does it affect my taxes? +
The assessment ratio is the percentage of market value used to calculate your taxable assessed value. Most states assess at 100% of market value, but some use lower ratios — Louisiana assesses residential property at 10% of market value, North Carolina at 100%, California at 100% (but with Prop 13 purchase-price limitations). A $500,000 home in a state with an 80% assessment ratio has an assessed value of $400,000. The mill rate is then applied to the assessed value, not the market value.
How often do property taxes change? +
Property taxes can change for two reasons: (1) your property's assessed value changes during a reassessment cycle (annually in some states, every 2–5 years in others), or (2) the local government changes the mill rate as part of budget setting. Even if your home value stays flat, mill rate increases can raise your bill. After a reassessment, increases in assessed value are often phased in over several years. California, Michigan, and several other states cap annual assessment increases to protect homeowners from sharp tax spikes.
How do I find my property's actual assessed value? +
Your county assessor (or property appraiser) maintains public records for every parcel. Search your county assessor's website using your address or parcel number — most counties have free online lookup tools. Your annual property tax notice also shows the assessed value and the breakdown of taxing districts. If you just purchased a property, expect a reassessment to the purchase price in many states (especially California when ownership transfers).
Can I appeal my property tax assessment? +
Yes. Every jurisdiction allows formal appeals of assessed values. The process typically requires: (1) filing an appeal within the appeal window (often 30–90 days after receiving your assessment notice), (2) gathering evidence of lower comparable sales (sold properties within the past 12 months, similar size, condition, and location), and (3) presenting your case to the county appeals board. Many property owners hire tax appeal consultants who work on contingency (taking a percentage of the tax savings). Appeal success rates are 20–40% for well-documented cases. Even if denied, you can typically escalate to tax court.
Are property taxes deductible on my federal taxes? +
Yes, but with limits. Since the 2017 Tax Cuts and Jobs Act, the SALT (State and Local Tax) deduction is capped at $10,000 per year ($5,000 for married filing separately) for primary residences. This cap makes the deduction less valuable for homeowners in high-tax states like New Jersey, New York, and Illinois. For investment properties, property taxes are fully deductible as a business expense with no SALT cap — you deduct them on Schedule E. This is a key tax advantage of real estate investing over primary homeownership.
How do property taxes affect real estate investment returns? +
Property taxes are one of the largest operating expenses for rental properties — often 20–35% of gross rent in high-tax states. A $300,000 rental property in New Jersey generating $24,000/year in rent might owe $6,700/year in taxes (28% of gross rent). The same property in Florida or Tennessee would owe $2,700–3,200 (11–13% of rent). This spread dramatically affects cap rates and cash-on-cash returns. Always verify actual tax bills (not estimates) before completing underwriting. Use our
Cash Flow Calculator to model the full impact on your returns.
Which states have the highest and lowest property taxes? +
Highest effective rates: New Jersey (~2.23%), Illinois (~2.05%), New Hampshire (~1.93%), Connecticut (~1.73%), Vermont (~1.73%). These states fund schools and local services largely through property taxes, resulting in high bills even for modest homes. Lowest effective rates: Hawaii (~0.28%), Alabama (~0.40%), Colorado (~0.55%), Louisiana (~0.55%), South Carolina (~0.57%). Note that low property tax states often have higher income or sales taxes to compensate. For investors, the total tax burden — income, property, transfer — matters more than any single tax.