Property Taxes and Your Home's Assessed Value

How Property Taxes Are Calculated

Your annual property tax bill is the product of two numbers: your home's assessed value and your local tax rate (often expressed as a mill rate, where one mill equals $1 per $1,000 of assessed value). For example, a home assessed at $300,000 in a jurisdiction with a 20-mill rate would owe $6,000 per year before any exemptions.

Because assessed value drives the calculation, even a modest error in your assessment can translate into hundreds of dollars of overpayment annually. That makes understanding how this number is set — and whether it is accurate — a meaningful part of homeownership budgeting. For broader context on how different valuations interact, see our guide on assessed value, appraised value, and market value.

How Assessors Determine Your Home's Value

Unlike a mortgage appraisal — which involves a licensed appraiser physically inspecting your property — property tax assessments are conducted through mass appraisal. Assessors use statistical models that account for recent comparable sales, neighborhood trends, square footage, lot size, age, and construction quality across thousands of properties at once.

Assessors may not enter your home every cycle. Many rely on permit records, aerial imagery, and public sales data to update their models. This efficiency-driven approach can introduce inaccuracies, particularly if your property has unique features, deferred maintenance, or conditions the data does not capture.

To understand how a private appraisal — conducted for lending purposes — differs from a tax assessment, read our explainer on how home appraisals actually work.

Exemptions That Reduce Your Tax Burden

Many states and counties offer exemptions that reduce the assessed value subject to taxation. The most common is the homestead exemption, which lowers the taxable base for a property that serves as the owner's primary residence. Other frequently available exemptions include:

• Senior citizen exemptions — income or age-based reductions for qualifying older homeowners
• Veterans' exemptions — partial or full reductions for eligible service members and surviving spouses
• Disability exemptions — available in many jurisdictions for homeowners with qualifying disabilities
• Agricultural exemptions — applicable when land meets local definitions of active farm use

Exemptions are not applied automatically in most places — homeowners must apply through their local assessor's office. Missing an application deadline can mean paying a higher bill for an entire tax year.

Appealing an Assessment You Believe Is Wrong

If you think your assessed value is too high, you have the right to appeal. The process varies by jurisdiction but generally follows these steps:

1. Review your assessment notice — check for errors in recorded square footage, bedroom count, lot size, or property class.
2. Research comparable sales — find recent sales of similar nearby homes to build an evidence-based case.
3. File within the deadline — most jurisdictions allow 30 to 90 days from the date of the assessment notice.
4. Attend the hearing — present your evidence to a review board; some jurisdictions also offer informal review before a formal hearing.

A private appraisal can strengthen your appeal. While there is no guarantee of a reduction, factual errors and strong comparable data are among the most persuasive arguments. For related reading on disputing value determinations, our article on disputing a low home appraisal covers the reconsideration process in detail.