6 min read Jan 15, 2024

How to Find Out If Your Property Tax Bill Is Too High?

Edited By

Carol Coutinho

Edited By

Carol Coutinho

Editor, Houzeo

Carol is a versatile content editor and writer, crafting riveting narratives with precision and finesse. When not reading a novel, she is immersed in the enthralling world of the theater.

Find Carol Here

Property tax is an amount you pay annually to the local tax office for owning real estate. This amount varies significantly from state to state, as well as from county to county. According to the ACS, homeowners paid a median of $2,971 in property taxes in 2021.

Real estate taxes are crucial in funding essential public services, like education and infrastructure. Whether buying a house or looking to move, this guide will shed light on the vital details.

Find Your Dream Home 🏡

View 19,762,946 Homes For Sale in the US

Where do you want to live?

Please enter valid address

What Is Property Tax?

Property tax, also termed real estate tax, is an ad valorem tax that homeowners pay. In simpler terms, your property’s assessed value determines the real estate tax you have to pay.

The local or state government levies this tax. It is used to build schools and roads, and fund services like fire departments and the police force.

If you want to save some amount on property tax, homeowners have many tax deductions. However, ensure you maintain records of property tax payments made during the year to claim these deductions.

👉 Property Tax 101

  • Property taxes are usually based on your property’s assessed value, mill rate, and the exemptions you qualify for.
  • Property owners pay real estate taxes. Tenants living in rented properties do not pay this tax.
  • You can pay your real estate taxes by setting up an escrow account with your mortgage lender or paying directly to your local tax office.
  • State or local governments collect this tax to fund services like schools, roads, and public safety.

When to Pay Property Tax?

Property taxes must be paid annually. You can also pay them every month if your county laws permit. Additionally, you pay property taxes in arrears. This means you’ll pay 2023’s taxes in 2024.

The local authority will reevaluate the tax-assessed value of your property every 1 to 5 years. That’s why, before you file your taxes, check the updated numbers.

How Are Property Taxes Calculated?

The local government determines how homeowners’ taxes are calculated. The calculation method differs depending on the region, but here’s how you can get an estimate:

Step 1: Find Out the Assessed Value of Your Property

The assessed value is an estimated amount determined by your local tax assessor. This value is the basis on which your real estate tax is calculated.

You can check your local government’s website or your property tax bill to find the assessed value of your home.

Step 2: Add Your Mill Rate

The mill rate is the sum of all the mill levies or millage rates of a particular tax jurisdiction. Local governing authorities levy this amount on every $1,000 of your property’s assessed value. For instance, with a 0.01% mill rate and a $400,000 assessment, your millage would be $4,000.

Step 3: Deduct Any Tax Exemptions

Here are some common property tax exemptions you can use to reduce your tax amount:

  • Income-Based Exemptions: Offers relief to homeowners with low incomes or experiencing financial hardship.
  • Renewable Energy Exemptions: Provides incentives for homeowners who install renewable energy systems, like solar panels, on their property.
  • Homestead Exemption: Applies to homeowners who use the property as their primary residence.
  • Senior Citizen Exemption: Offers tax relief to senior citizens over 65 years of age.
  • Disability Exemption: Applies to those who fulfill the homestead exemption and are totally disabled.
  • Veterans Exemption: Provides relief to veterans who meet specific criteria, such as having a service-related disability.

» Property Taxes By State: Check out the tax rates in your state.

How Are Property Taxes Paid?

Generally, there are 3 ways you can pay your property tax bill:

1. Through Monthly Mortgage Payments

If you have a mortgage on your home, the lender estimates your tax bill and divides it by 12. This amount includes 4 costs – principal, interest, tax, and insurance, known as PITI.

If the lender overestimates your tax bill, you get a refund. Similarly, you have to pay the outstanding amount if they underestimate your tax bill.

Book a Mortgage Lender Now

View 143+ Lenders in the US

2. To the Local Tax Office

You can pay your taxes to the tax office when it’s due. Your local office will send you timely bills that you can pay via credit or debit card, money order, eCheck, etc.

3. Through an Escrow Account

Some lenders need you to set up an escrow account. An estimated amount of your yearly tax bill is added to this account.

An escrow account is different from the account used for your monthly mortgage payments. The lender uses it to make payments to the local tax office when it’s due.

What Do Property Taxes Pay for?

Property taxes usually go towards the funding and upkeep of the following:

  • Public Amenities: Spaces like parks, community centers, or public pools need funding for care or new constructions.
  • Schools: It pays for the maintenance of public school premises and the teachers’ salaries.
  • Public Safety: Front-line workers like firefighters and police force receive their salaries from property taxes.
  • Health and Sanitation: A part of your housing taxes goes towards garbage collection, sewer management, stormwater management, and street cleaning.
  • Social Services: Tax revenue funds social services like public libraries and animal shelters.

Bottom Line

Property tax is a fundamental aspect of homeownership that varies significantly based on your location. Tax authorities calculate it using the assessed value of your property, and not its appraised or fair market value.

Real estate taxes can run into thousands of dollars. But you can avail of several tax deductions that help you reduce your financial stress.

Find Your New Home With Houzeo

With thousands of property listings, Houzeo.com is one of the biggest property listing sites in the US. Find condos, townhouses, co-ops, and other types of homes for sale on Houzeo.

Find Your Dream Home 🏡

View 19,762,946 Homes For Sale in the US

Where do you want to live?

Please enter valid address

» Need More Clarity? Read these exclusive Houzeo reviews and learn why the platform is the best in America’s competitive housing market.


What are property taxes based on?

Property taxes are primarily based on your home's assessed value. Other factors like local tax rates, mill rates, and tax exemptions affect your housing taxes.

Why do we pay property taxes?

Homeowners pay property taxes to fund essential public services like schools, public safety, and infrastructure. This benefits you and the community where you reside.

Do you pay property tax monthly or yearly?

You can choose to pay your taxes either annually or monthly. Most people prefer to pay their real estate taxes yearly.

» How to Pay Your Property Tax: Here are 3 options that can help you!

How does property tax work?

The local or state government determines your real estate taxes. A tax assessor in each locality calculates the assessed value of the properties. Using this value, we derive a fixed dollar amount that becomes your property tax. The tax assessor or your local tax authority reevaluates housing taxes annually.

Who pays property taxes?

If you own real estate, whether residential or commercial, you have to pay property tax. If you live in a rental property, your landlord pays this tax.

Save $20

On Silver & up plans

Use Coupon Code:


Need help? Call us on

(844) 448-0110