How to Calculate Property Tax
Find the assessed value of the property being taxed., Add the value of the land and improvements to get the total value., Find the current local government's tax rate., Find the property tax rates for other local agencies., Add your tax rates up...
Step-by-Step Guide
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Step 1: Find the assessed value of the property being taxed.
When it comes to real estate, property taxes are almost always based on the value of the land.
The more valuable the land, the higher the property taxes.
Because the value of land can change over time, so can your property tax liability, even if your local government does not specifically change the tax rate.
To start finding your property tax liability, you need to know how much the land you own is worth.
Property values are usually determined by a local or county assessor — someone whose job is specifically to do this.
To find the value of your residence, you can contact your local assessor's office or else your local tax authority.
Note that many assessors have tools online that will allow you to look up your property's value based on your address.
The assessor's office for Santa Clara Country in California has a great example of this sort of tool.You can also sometimes get home value estimates from financial institutions.
For example, Chase Bank offers a free online home value tool here. -
Step 2: Add the value of the land and improvements to get the total value.
The value of a piece of land is usually determined by two things: the value of the land itself and the value of whatever is built on the land (i.e., its improvements.) To find the total value of your property, you'll need to add these two values together.
Usually, the local assessor can provide both pieces of information.
For example purposes, let's find the property taxes for a house in ABC County, USA.
The county assessor values the land at $357,000, mainly due to its close proximity to a vibrant, bustling downtown area and the convenience of two nearby freeways.
The assessor values the house itself at $307,000.
Adding these two values, the total value of our property is 357,000 + 307,000 = $664,000.
In the next few steps, we'll use this value to find our property taxes. , Property tax is generally assessed as some percentage of the property's current value.
This tax rate can (and does) vary over time depending on the needs of the taxing agency — for instance, if your county has a budget shortfall, it may raise the tax rate to make ends meet.
Thus, up-to-date information is crucial.
Like your assessed property value, you can usually get this information from your local tax authority.
For example, in Santa Clara County, California, tax rate summaries are available online for free.Many municipalities apply the tax rate "per mill"
or per $1,000 in assessed value.
Don't let this confuse you — one mill is just 1/10 of one cent.For practical purposes, we can say that 10 mill of something is the same as 1%.
E.g., a 20 mill levy on $100,000 would equal 2% of $100,000, or $2,000.
For the purposes of our example, let's say that ABC County has a 10 mill levy on our property.
This amounts to 1% of our property's total value. , The local government isn't the only organization that relies on property tax revenues.
Other organizations that serve the local community often require their own share of property taxes.
Notably, most public school districts get the majority of their revenue from local property taxes — about 77% in 2007, the most recent year that data is available.Cities, towns, and other local entities may also require property taxes.
In our example, let's say that the city of Appleton, where we live in ABC County, has its own 20 mill (2%) property tax and that the Appleton Unified School District levies its own property tax at a 30 mill rate (3%). , When you know all of the different property taxes that you will have to pay, finding your total liability is fairly easy.
Start by adding up the different tax rates to get one total property tax rate that you'll need to pay.
In our example, since we owe a 1% property tax to the county, 2% to the city, and 3% to the school district, we owe, in total, 1 + 2 + 3 = 6% , Take your total property tax rate and multiply it by the value of the property you are dealing with.
The answer you get is the amount of money you owe in property tax.
Don't forget that, to multiply a percentage, you must either first change the percentage back to its decimal form or else divide your answer by
100.
In our example, our total property tax rate is 6% and our property is worth $664,000.
To find the amount we owe in taxes, we multiply
0.06 × $664,000 = $39,840. -
Step 3: Find the current local government's tax rate.
-
Step 4: Find the property tax rates for other local agencies.
-
Step 5: Add your tax rates up.
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Step 6: Multiply by your property value.
Detailed Guide
When it comes to real estate, property taxes are almost always based on the value of the land.
The more valuable the land, the higher the property taxes.
Because the value of land can change over time, so can your property tax liability, even if your local government does not specifically change the tax rate.
To start finding your property tax liability, you need to know how much the land you own is worth.
Property values are usually determined by a local or county assessor — someone whose job is specifically to do this.
To find the value of your residence, you can contact your local assessor's office or else your local tax authority.
Note that many assessors have tools online that will allow you to look up your property's value based on your address.
The assessor's office for Santa Clara Country in California has a great example of this sort of tool.You can also sometimes get home value estimates from financial institutions.
For example, Chase Bank offers a free online home value tool here.
The value of a piece of land is usually determined by two things: the value of the land itself and the value of whatever is built on the land (i.e., its improvements.) To find the total value of your property, you'll need to add these two values together.
Usually, the local assessor can provide both pieces of information.
For example purposes, let's find the property taxes for a house in ABC County, USA.
The county assessor values the land at $357,000, mainly due to its close proximity to a vibrant, bustling downtown area and the convenience of two nearby freeways.
The assessor values the house itself at $307,000.
Adding these two values, the total value of our property is 357,000 + 307,000 = $664,000.
In the next few steps, we'll use this value to find our property taxes. , Property tax is generally assessed as some percentage of the property's current value.
This tax rate can (and does) vary over time depending on the needs of the taxing agency — for instance, if your county has a budget shortfall, it may raise the tax rate to make ends meet.
Thus, up-to-date information is crucial.
Like your assessed property value, you can usually get this information from your local tax authority.
For example, in Santa Clara County, California, tax rate summaries are available online for free.Many municipalities apply the tax rate "per mill"
or per $1,000 in assessed value.
Don't let this confuse you — one mill is just 1/10 of one cent.For practical purposes, we can say that 10 mill of something is the same as 1%.
E.g., a 20 mill levy on $100,000 would equal 2% of $100,000, or $2,000.
For the purposes of our example, let's say that ABC County has a 10 mill levy on our property.
This amounts to 1% of our property's total value. , The local government isn't the only organization that relies on property tax revenues.
Other organizations that serve the local community often require their own share of property taxes.
Notably, most public school districts get the majority of their revenue from local property taxes — about 77% in 2007, the most recent year that data is available.Cities, towns, and other local entities may also require property taxes.
In our example, let's say that the city of Appleton, where we live in ABC County, has its own 20 mill (2%) property tax and that the Appleton Unified School District levies its own property tax at a 30 mill rate (3%). , When you know all of the different property taxes that you will have to pay, finding your total liability is fairly easy.
Start by adding up the different tax rates to get one total property tax rate that you'll need to pay.
In our example, since we owe a 1% property tax to the county, 2% to the city, and 3% to the school district, we owe, in total, 1 + 2 + 3 = 6% , Take your total property tax rate and multiply it by the value of the property you are dealing with.
The answer you get is the amount of money you owe in property tax.
Don't forget that, to multiply a percentage, you must either first change the percentage back to its decimal form or else divide your answer by
100.
In our example, our total property tax rate is 6% and our property is worth $664,000.
To find the amount we owe in taxes, we multiply
0.06 × $664,000 = $39,840.
About the Author
Heather Wells
A passionate writer with expertise in home improvement topics. Loves sharing practical knowledge.
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