Property tax is one of the biggest costs of owning a home, and one of the hardest to predict. Two houses with the same price can have very different bills depending on the state, the county, and even the school district they sit in. This guide explains how property tax is calculated, shows typical 2026 property tax rates by state, and walks through real examples, including a mill levy calculation from an actual tax bill. If you would rather skip the math, our property tax calculator does it for you.
What is property tax?
Property tax is a yearly local tax on land and buildings. Counties, cities, school districts, and other local bodies charge it to pay for schools, police, fire departments, roads, and parks. There is no federal property tax, and each state sets its own rules for how homes are valued and taxed.
How is property tax calculated?
Almost every property tax bill follows the same four steps:
Your home is appraised. The county assessor estimates its market value, also called the appraised value.
An assessment rate is applied. Some states tax only part of that value. Kansas, for example, taxes 11.5% of a home's value. Others tax the full value.
Exemptions come off. Homestead, senior, disability, and veteran exemptions lower your taxable value.
The tax rate is applied. The rate is often set in mills. One mill is $1 of tax for every $1,000 of assessed value, so 100 mills equals a 10% rate on the assessed value.
Put together: property tax = (appraised value × assessment rate − exemptions) × mill levy ÷ 1,000. A home assessed at $30,000 in a 100-mill district owes $30,000 × 100 ÷ 1,000 = $3,000 a year. Read more in our guide to how property tax works.
Example: a mill levy calculation in Kansas
Say you own a $300,000 home in Kansas, and your tax statement shows a total mill levy of 130 mills.
Assessed value: $300,000 × 11.5% = $34,500
Tax before the exemption: $34,500 × 130 ÷ 1,000 = $4,485
Residential exemption: Kansas exempts the first $75,000 of a home's value from the 20-mill statewide school levy. That is $75,000 × 11.5% × 20 ÷ 1,000 = $172.50 off.
Annual property tax: $4,312.50, or about $359 a month
You can run the same calculation with the numbers from your own statement in our mill levy calculator, or use the Kansas property tax calculator, which already knows the state's assessment rates, exemption, and refund programs.
2026 property tax rates by state
An easier way to compare places is the effective property tax rate: the tax actually paid each year divided by the home's market value. Across the US, the typical home is worth $360,600 and pays $3,211 a year, an effective rate of about 0.89%. At that rate, a $300,000 home pays about $2,671 a year, or $223 a month.
Here is what a $350,000 home would pay at each state's typical rate:
Illinois (1.92%): about $6,732 a year. See the Illinois property tax calculator.
New Jersey (1.89%): about $6,603. See the New Jersey property tax calculator.
New York (1.45%): about $5,090
Texas (1.31%): about $4,591. Texas has no state income tax, so local governments lean more on property tax. See the Texas property tax calculator.
Kansas (1.25%): about $4,374
Florida (0.75%): about $2,639
California (0.71%): about $2,474. Proposition 13 limits the base rate to 1% of the purchase price, and taxable value can rise by only 2% a year until the home is sold. See the California property tax calculator.
Colorado (0.49%): about $1,723
Hawaii (0.27%): about $953, the lowest in the country
These rates are medians from the Census Bureau's American Community Survey. Rates vary even more within a state, so compare property tax by county with our county property tax calculator.
Monthly property tax and escrow
If you have a mortgage, you probably do not pay the county directly. Your lender adds a twelfth of your yearly bill to each mortgage payment, holds it in an escrow account, and pays the bill when it is due. Lenders may also keep a cushion of up to two months of payments.
When your assessment or tax rate goes up, your escrow payment goes up at the next yearly escrow review. That is why a monthly mortgage payment can rise even on a fixed-rate loan. Use the home property tax calculator to see your monthly property tax and plan for the change.
Can you deduct property tax?
Yes, if you itemize. Property tax counts toward the state and local tax (SALT) deduction, together with state income or sales tax. For 2026, the SALT cap is $40,400, and it is reduced for incomes above $505,000, though never below $10,000. If you take the standard deduction ($16,100 single, $32,200 married filing jointly), property tax gives you no federal tax benefit.
How to lower your property tax
Claim your homestead exemption. Many states require you to apply once, and some will not add it automatically.
Check your assessment. Look for mistakes such as the wrong square footage, an extra bathroom, or a finished basement you do not have.
Appeal if the value is too high. Compare recent sales of similar homes nearby. Appeal deadlines are often only 30 to 60 days after the notice is mailed.
Ask about relief programs. Seniors, veterans, people with disabilities, and lower-income homeowners can often get a freeze, credit, or refund.
Property tax FAQ
How is property tax calculated on a house?
Multiply your home's assessed value, after exemptions, by the local tax rate. When the rate is in mills, multiply by the mill levy and divide by 1,000.
What is a good property tax rate?
The US typical effective rate is about 0.89% of home value. Rates below 0.5% are low, and rates above 1.5% are among the highest in the country.
Why did my property tax go up if the rate did not change?
Your assessed value probably went up. When home prices rise, reassessments raise the taxable value even when the mill levy stays the same.
Is there a free property tax estimator for 2026?
Yes. Our free property tax estimator works out your yearly and monthly property tax from your home value and county, or exactly from the mill levy on your tax bill.
This article is for general information and is not tax, legal, or financial advice. Tax rules change, so confirm your situation with a tax professional.