Counties, cities and school districts charge property tax every year on land and buildings. It pays for schools, police, roads and other local services. There's no federal property tax.
How the bill is figured
- Your county values the property. The assessor sets its market (appraised) value.
- Some states tax only part of it. The share taxed is the assessment rate. Others tax the full value.
- Exemptions come off. Homestead, senior and veteran exemptions lower the taxable value.
- The tax rate is applied. It's often set in mills: one mill is $1 for every $1,000 of assessed value.
For example, a home assessed at $30,000 in a 100-mill district owes $30,000 × 100 ÷ 1,000 = $3,000 a year.
Typical rates
- US typical rate: 0.89% of home value. A $300,000 home pays about $2,671 a year, or $223 a month.
- Highest: Illinois, 1.92%.
- Lowest: Hawaii, 0.27%.
These are median taxes paid divided by median home values, from the Census Bureau's American Community Survey. Your own bill depends on your district and when the home was last reassessed.
Paying it
- With a mortgage, your lender usually collects a twelfth of the bill each month in escrow and pays the county for you.
- You can deduct it on your federal return if you itemize, along with state and local income or sales tax, up to the SALT cap.
- Seniors, veterans and lower-income homeowners can often get part of it back through state relief programs.
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