The basic formula: assessed value times tax rate

Property tax is calculated by multiplying your property's assessed value by the tax rate set by your local government. That is the entire calculation. The assessed value is what your county or municipality says your property is worth for tax purposes — not what you paid for it, and usually not what it would sell for today. The tax rate is a percentage or dollar amount per $1,000 of assessed value, and it varies by county, city, school district, and special districts in your area.

The reason this matters is that assessed value and market value are almost never the same number. A house worth $400,000 on the open market might be assessed at $320,000, or $380,000, or $420,000 depending on when it was last assessed and what your state's assessment rules allow. Your tax bill depends almost entirely on that assessed figure, not on what your house is actually worth.

Key Takeaways

  • Assessed value is determined by your county assessor's office, usually once every one to five years depending on your state, and is not the same as what your house would sell for.
  • Tax rates are set by your local government and are expressed either as a percentage of assessed value or as a dollar amount per $1,000 of assessed value.
  • You can find both your assessed value and your tax rate on your property tax bill or by contacting your county assessor's office directly.
  • Most states allow you to challenge your assessed value if you believe it is wrong, and the process usually involves filing a form with your assessor or county board of review.

How assessed value is determined

Your county assessor's office assigns an assessed value to your property based on one of three main methods: the sales comparison approach, the cost approach, or the income approach. Most residential properties use the sales comparison approach, which means the assessor looks at what similar homes in your area have sold for recently and adjusts for differences in size, condition, location, and features. If three comparable homes sold for $350,000, $365,000, and $380,000, your home might be assessed somewhere in that range.

The cost approach is used when comparable sales are hard to find — for example, with new construction or unusual properties. The assessor estimates what it would cost to rebuild your house from scratch, subtracts for wear and tear, and adds the land value. The income approach is used for rental properties and commercial buildings, where the assessor looks at what the property generates in rent or income.

Most states reassess properties on a cycle: every year in some states, every three years in others, every five years in still others. Some states use a hybrid system where they reassess every few years but also allow adjustments based on building permits or major renovations. You can find out your state's reassessment schedule by calling your county assessor's office or checking their website.

Understanding tax rates and how they are set

Tax rates are set by your local government — usually your county, city, school district, and any special districts that serve your property. Each of these bodies sets its own rate, and they are added together to create your total tax rate. A property might have a county rate of 0.8%, a city rate of 0.3%, a school district rate of 1.2%, and a special district rate of 0.1%, for a combined rate of 2.4%.

Tax rates are expressed in two ways depending on your state. Some states show them as a percentage of assessed value — for example, 2.4% of your assessed value. Other states show them as a dollar amount per $1,000 of assessed value — for example, $24 per $1,000. These are the same thing: 2.4% equals $24 per $1,000. Your property tax bill will show which format your locality uses.

Tax rates change every year because local governments adjust them based on their budgets and the total assessed value of all properties in their jurisdiction. If your county needs more money for schools or roads, the rate may go up. If property values in your area rise significantly, the rate may go down even if the government needs the same amount of money, because the total assessed value is higher.

Working through a real example

Suppose your home is assessed at $350,000 and your combined tax rate is 1.2% (or $12 per $1,000). The calculation is straightforward: $350,000 × 0.012 = $4,200. Your annual property tax bill is $4,200. If your tax rate is expressed as $12 per $1,000, you would calculate it as ($350,000 ÷ $1,000) × $12 = 350 × $12 = $4,200. Same answer either way.

Now suppose your assessed value increases to $365,000 the next year because of a reassessment, but the tax rate stays at 1.2%. Your new bill is $365,000 × 0.012 = $4,380. That is a $180 increase. Or suppose your assessed value stays at $350,000 but the tax rate drops to 1.1% because property values in your area rose and the government did not need to raise rates. Your bill would be $350,000 × 0.011 = $3,850. That is a $350 decrease.

Where to find your assessed value and tax rate

Your property tax bill shows both your assessed value and your tax rate, usually near the top or in a summary section. If you have lost your bill or want to check the information, contact your county assessor's office. Most assessors now have online portals where you can search by address or parcel number and see your assessed value, recent sales data used to justify that value, and the tax rate breakdown by jurisdiction.

To find your assessor's office, search "[your county name] assessor" or "[your county name] property appraiser" — different states use different titles. The office is usually in the county courthouse or county administrative building. You can call, visit in person, or use their website. Have your address or parcel number ready. The parcel number is on your property tax bill and is a unique identifier for your property in the county's system.

Challenging your assessed value if you think it is wrong

If you believe your assessed value is too high, you have the right to challenge it. The process varies by state, but most require you to file a formal objection with your county assessor's office or a county board of review within a specific window — often 30 to 60 days after you receive your assessment notice. Some states allow you to challenge online; others require a written form.

To support your challenge, gather evidence that your assessed value is wrong. This might include a recent appraisal from a licensed appraiser, recent sales of truly comparable homes in your neighborhood, photographs showing your home is in worse condition than the assessor's records indicate, or documentation of major damage or deferred maintenance. The assessor will review your evidence and either adjust your value or uphold the original assessment. If you disagree with the result, you can usually appeal to your county board of review or tax assessment appeals board.

The important date to challenge is critical. If you miss it, you generally cannot dispute that year's assessment and will have to wait until the next reassessment cycle. Check your assessment notice for the exact important date in your county, or call your assessor's office to confirm.

How exemptions and abatements affect your calculation

Some property owners are exempt from property tax entirely or pay a reduced amount. Common exemptions include owner-occupied homes (in some states), properties owned by nonprofits or religious organizations, government property, and agricultural land. If you own a home and live in it, you may be may have access to to a homestead exemption that reduces your assessed value by a fixed amount or percentage.

An abatement is a temporary reduction in your tax bill, usually granted for specific reasons like new construction, major renovation, or economic hardship. Abatements are typically granted for a set number of years — for example, five or ten years — and then expire. If you think you may be may have access to to an exemption or abatement, ask your assessor's office what programs exist in your county and what documents you need to submit.

Frequently Asked Questions

Why is my assessed value different from what I paid for my house?

Assessed value is based on what similar homes have sold for recently, not on your individual purchase price. If you bought your home years ago, the market may have changed. If you bought it recently but paid more or less than comparable sales, the assessor will adjust to the market average. Assessed value also changes with reassessments, while your purchase price never does.

Can my property tax bill go down if my assessed value stays the same?

Yes. If property values in your area rise overall, the total assessed value in your jurisdiction increases. If the government does not need more money, it can lower the tax rate to keep total revenue the same. Your bill would then decrease even though your assessed value did not change.

How often does my assessed value change?

This depends on your state. Some states reassess every year, others every three to five years, and a few allow assessments to remain unchanged for longer periods. Check your assessment notice or call your county assessor to find out your state's schedule. You may also see your assessed value change if you file a building permit, make major renovations, or successfully challenge the assessment.

What happens if I do not pay my property tax bill?

Your county can place a lien on your property, meaning they have a legal claim against it. If you do not pay for long enough, the county can foreclose and sell your home to recover the unpaid taxes. The exact timeline varies by state but is usually several years. If you cannot pay, contact your assessor's office or county tax collector about payment plans or hardship programs.

Is there a way to lower my property tax bill permanently?

Challenging an inflated assessed value is the most direct route. You can also look into exemptions or abatements your county offers. Some states allow homeowners to freeze their assessed value at a certain point, though this is uncommon. Beyond that, your bill will change with reassessments and tax rate changes set by your local government.