How to Calculate Property Taxes
Calculating your property tax comes down to three inputs: your property's assessed value, the assessment ratio, and the mill rate. This guide walks through each step with worked examples. For a hands-on estimate, use the property tax calculator.
The Property Tax Formula
No matter what state you are in, the underlying formula is the same:
Where:
- Assessed Value = Market Value × Assessment Ratio (varies by state)
- Taxable Value = Assessed Value − Exemptions
- Mill Rate = combined rate from all local taxing bodies; 1 mill = $1 per $1,000 of assessed value
Step 1: Find Your Market Value
Your market value (also called "appraised value" or "just value" depending on the state) is the estimated price your property would sell for. Your county assessor sets this annually. You can find it on your:
- Annual assessment notice (mailed by your county assessor)
- County assessor's online property search
- Property tax bill
Step 2: Apply the Assessment Ratio
Most states do not tax the full market value — they assess at a fraction of it. This fraction is the assessment ratio. Examples from state law:
- Michigan: 50% of true cash value (State Equalized Value)
- Ohio: 35% of appraised value
- Georgia: 40% of fair market value
- Illinois (most counties): 33.33% of fair market value
- Texas, Florida, California: 100% (assessed at full market value or just value)
See your state's page for the exact ratio and the official source. Many states display the assessed value directly on your tax bill — you can enter it into the calculator without needing to compute the ratio separately (set the ratio to 100% in that case).
Step 3: Subtract Exemptions
Most states offer a homestead exemption (a dollar reduction in assessed value for primary residences) and may offer additional exemptions for veterans, seniors, or persons with disabilities. Subtract your total exemption from the assessed value to get your taxable value.
Example: Ohio assessed value $70,000 − $2,500 homestead exemption = $67,500 taxable value.
Step 4: Find Your Mill Rate
Your total mill rate is the sum of all the rates levied by every taxing body on your property: county, municipality, school district, and any special districts. It appears as a combined total on your tax bill, or broken out by levy. Common sources:
- Your county property tax bill (summer and winter bills if your state uses two cycles)
- Your county assessor's or treasurer's website
- Your county's Truth in Millage (TRIM) or equivalent annual notice
Use the mill rate calculator to convert your mill rate into a tax amount, with an escrow breakdown.
Step 5: Calculate Your Annual Tax
Apply the formula: Taxable Value × (Mill Rate / 1,000).
Worked example — Michigan:
Market value: $300,000 • Assessment ratio: 50% • Mill rate: 30 mills • No exemption
Assessed value: $300,000 × 0.50 = $150,000
Annual tax: $150,000 × (30 / 1,000) = $150,000 × 0.030 = $4,500
Monthly: $4,500 / 12 = $375
Worked example — Ohio:
Market value: $200,000 • Assessment ratio: 35% • Mill rate: 60 mills • No exemption
Assessed value: $200,000 × 0.35 = $70,000
Annual tax: $70,000 × (60 / 1,000) = $70,000 × 0.060 = $4,200
Monthly: $4,200 / 12 = $350
Use the interactive calculator to try different values instantly.
What Is an Effective Tax Rate?
Because states use different assessment ratios, comparing raw mill rates across states is misleading. The effective rate divides annual tax by market value, making rates comparable regardless of ratio:
In the Michigan example above: ($4,500 / $300,000) × 100 = 1.5% effective rate.
In the Ohio example: ($4,200 / $200,000) × 100 = 2.1% effective rate.
What If My Assessment Seems Too High?
If your assessed value implies a market value higher than what comparable homes are selling for, you may be able to appeal. Read our guide to appealing a property tax assessment, which includes a comparison widget.
Frequently Asked Questions
You need three things: (1) your property's market or assessed value, (2) your county's assessment ratio (the percentage of market value that is taxed), and (3) your total mill rate (combined rate from all local taxing bodies). Subtract any applicable exemptions from the assessed value before applying the rate.
Annual Tax = Taxable Assessed Value × (Mill Rate / 1,000). Where Taxable Assessed Value = (Market Value × Assessment Ratio) − Exemptions. One mill = $1 per $1,000 of assessed value.
The same underlying formula applies everywhere — assessed value times tax rate — but states differ in: the assessment ratio (fraction of market value taxed), what exemptions are available, and whether the state or local government sets rates. Some states like Texas appraise at 100% of market value; Ohio uses 35%; Michigan uses 50%. See our state-specific pages for details.
The effective rate is your annual tax as a percentage of market value. It accounts for the assessment ratio, making rates comparable across states with different ratios. Effective Rate = Annual Tax / Market Value × 100. For example, a $300,000 home paying $6,000/year has an effective rate of 2.0%.