How property tax is calculated

The formula

Assessed value × assessment ratio × total levy (mill rate) − exemptions = tax bill. A mill is $1 per $1,000 of taxable value, so 25 mills on $200,000 of taxable value is $5,000. The "total levy" stacks every taxing district on your parcel: county, city, school district, community college, fire, library, hospital, water. School districts are usually the largest slice.

Assessed value is not market value

Many states assess at a fraction of market value — 10% in Illinois (Cook County residential), 35% in Ohio, 100% in Florida. That is why a 6% "rate" in Cook County works out to an effective 1.9% of what the home is worth. The effective rate on this site skips the ratio games: median tax actually paid ÷ median home value.

Caps and reassessment

California (Prop 13), Florida (Save Our Homes), Michigan and others cap how fast taxable value can rise for a current owner, then reset it to purchase price when the home sells. So the seller may have paid $3,000 and you will pay $9,000 on the same house. Ask the assessor for a post-sale estimate before you buy.

Exemptions

Homestead (primary residence), senior, disabled-veteran and agricultural exemptions cut the taxable value or freeze it. Most must be applied for once, by a deadline (often March 1 or April 30). The medians here already include exemptions people claimed, which is one reason a new buyer's bill runs above the median.

When the number changes

Levies are set each year when local budgets pass; assessments update on a cycle (annually in Texas and Florida, every three years in Cook County, up to eight in some Ohio counties). A notice of new assessed value arrives before the bill — that is the moment to appeal.