How Is Property Tax Calculated?
Your property tax bill is your taxable value multiplied by the tax rate set by the local governments that serve your address. Kansas's Department of Revenue writes it as two steps: appraised value × assessment rate = assessed value, then assessed value × mill levy ÷ 1,000 = property tax (Kansas Department of Revenue).
The details change by state, but almost every bill is built from the same three parts: a value, any exemptions taken off it, and a rate.
Step 1: The value the county puts on your home
The county assessor or appraisal district sets a value on your property. Depending on the state, the value that gets taxed is the full market value or a set percentage of it (the assessment rate or ratio). In Texas, for example, the appraisal district sets the value as of January 1 each year (Texas Comptroller).
This is the number you can challenge. If the county's value is higher than what your home would sell for, the bill is higher than it should be. See assessed value vs. market value for how the two differ.
Step 2: Exemptions come off
Texas states it plainly: "The property taxes you pay are based on your property's value less any exemptions applied" (Texas Comptroller).
The Comptroller's example: a home appraised at $300,000 with the $140,000 school district homestead exemption is taxed by the school district as if it were worth $160,000 (Texas Comptroller). Our Texas homestead exemption guide covers who qualifies and how to apply. Exemptions differ by state, so check your own.
Step 3: The tax rate
Each local taxing unit (school district, city, county, special district) sets its own rate, and your bill adds them together (Texas Comptroller). In states that use mills, one mill equals $1 of tax per $1,000 of assessed value, and the mill levy is the combined rate of all the local units (Kansas Department of Revenue).
A worked example (Kansas)
Kansas publishes this example for a $200,000 residence with a combined levy of 130 mills (Kansas Department of Revenue):
| Step | Calculation | Result |
|---|
| Appraised value | | $200,000 |
| Assessed value | $200,000 × 11.5% residential rate | $23,000 |
| Tax | $23,000 × 130 ÷ 1,000 | $2,990 |
The rate and the assessment percentage are Kansas's. Your state and county will use different ones, so use this to see the method, not to estimate your bill.
California works differently
California does not tax your home at current market value. Proposition 13 limited the tax rate to one percent plus whatever is needed to pay local voter-approved bonds, and capped growth in assessed value at no more than two percent a year (California BOE).
Your assessed value starts from the market value at your last purchase or new construction (the base year value). Each year it is adjusted by an inflation factor tied to the California Consumer Price Index, capped at two percent. The assessor enrolls the lower of that factored value or the current market value (California BOE).
So two identical neighbors can pay very different bills if they bought in different years. If market value falls below your factored value, you can ask for the lower figure, which California calls a Proposition 8 reduction (California BOE).
Why your bill goes up
A bill rises when the value goes up, an exemption is lost, or any local unit raises its rate. We walk through each cause in why did my property taxes go up.
What you can change
You usually cannot change the tax rate. You can challenge the value, and you can make sure every exemption you qualify for is on the bill. Roughly 30-60% of properties are over-assessed, and fewer than 5% of owners challenge their assessment, according to the National Taxpayers Union Foundation.
Next steps
- See your county's deadline and filing steps: appeal rules and deadlines by state.
- Run the free over-assessment check to see how your assessed value compares with recent sales.
- If you want the evidence and documents prepared for you, the $50 Appeal Case does that. You review, sign and file it yourself. We are not attorneys or a tax firm.
Quick answers
How do I calculate my property tax?
Take your taxable value (after exemptions and any assessment percentage), then multiply by your combined local tax rate. Your county's tax bill or assessor site lists the rate and the value used.
What is a mill?
One mill is $1 of tax per $1,000 of assessed value (Kansas Department of Revenue).
Is property tax based on purchase price or current value?
It depends on the state. California bases it on the value at your last sale or new construction, adjusted by up to two percent a year (California BOE). Texas appraises value each year as of January 1 (Texas Comptroller).
