What are Property Taxes?

By RealtyCrunch IncApril, 26th 2020
What are Property Taxes?

Property tax is a tax on a real estate used to fund local government initiatives, often schools.

How are property taxes determined?

Local governments typically look at two things while assessing the property taxes.

  1. Where is the property?
  2. How much is it worth?

How is property tax calculated?

Property tax = value of the property  X  tax rate

Value of the property

  • Appraisal of the property

The tax rate

  • Often based on the “millage rate” term, where one mill is equal to one-thousandth of a dollar.
  • (I.E.. if the local property tax rate on homes is 20 mills, homeowners pay $20 in tax for every $1,000 in assessed home value. Accordingly, a house with a $200,000 assessed value would be taxed $4,000)