The short answer
- Americans pay about 0.89% of their home’s value a year in property tax: $3,560 on a $400,000 home.
- Typical state rates run from 0.27% in Hawaii to 1.92% in Illinois: $1,080 to $7,680 on the same home.
- Your bill is the taxable value (assessed value less exemptions) times the local rate.
- A homestead exemption on your main home can cut the bill by hundreds or thousands of dollars, but you usually have to apply.
How property tax works
Every property tax bill comes from the same three steps:
- Assessment. The county assessor estimates your home’s market value and applies the state’s assessment ratio.
- Exemptions. Homestead, senior, veteran and other exemptions come off the assessed value.
- Rate. Each local body (county, city, school district, library, fire district) sets a rate. Added together they make your total rate, which is applied to the taxable value.
Credits and rebates, where they exist, come off the final bill.
Market value and assessed value
Market value is what the home would sell for. Assessed value is the figure the tax is charged on. Many states assess at 100% of market value; others tax a fixed share. A state that assesses at 40% and a state that assesses at 100% can produce the same bill, if the first one’s rate is two and a half times higher. That is why comparing rates between places only works with effective rates.
Assessments are not always current. Some counties reassess every year; others every few years; a few states limit how fast assessed value can rise. Your assessment notice shows both figures.
Mill rates
Many places quote the rate in mills. One mill is one-tenth of a cent, or $1 of tax for every $1,000 of taxable value. A rate of 20 mills is 2%. To turn a percentage into mills, multiply by 10; to turn mills into a percentage, divide by 10.
| Mill rate | Percent of taxable value | Tax on $100,000 taxable |
|---|---|---|
| 10 mills | 1.0% | $1,000 |
| 20 mills | 2.0% | $2,000 |
| 35 mills | 3.5% | $3,500 |
| 60 mills | 6.0% | $6,000 |
A worked example
A $350,000 home in a county that assesses at 40% of value, with a combined rate of 60 mills and a $25,000 homestead exemption.
- Market value$350,000
- Assessed value40% of value$140,000
- Homestead exemption−$25,000
- Taxable value$115,000
- Rate60 mills = $60 per $1,0006%
Without the exemption, the bill would be $8,400, so the homestead exemption saves $1,500 a year. The effective rate is about 1.97% of market value, even though the headline rate is 6%.
Effective tax rates
The effective rate is the tax divided by the home’s market value. It cuts through assessment ratios and mill rates, so it is the only fair way to compare places. The state figures in the calculator are effective rates: the median real estate tax paid in each state divided by the median home value, from the Census Bureau’s 2024 American Community Survey. That is the same measure the Tax Foundation uses.
A state figure is an average. Rates inside a state differ by county, city and school district, sometimes by a factor of two or more. Use your own bill or the county’s published rate when you have it.
Property tax by state
Here is what a $400,000 home would pay at each state’s typical rate, for a selection of states:
States with no income tax, such as Texas and New Hampshire, often lean more on property tax. States with high home values, such as Hawaii and California, can raise a lot with a low rate. The calculator’s table ranks all 50 states and DC for the value you enter.
Homestead exemptions
A homestead exemption lowers the taxable value of the home you live in. It does not apply to rentals or second homes. Some are a fixed dollar amount, some are a percentage, and some apply only to certain levies, such as school taxes. Most states have one, and many counties add their own.
The exemption is rarely automatic. You apply once to the county appraiser or assessor, usually by a deadline early in the year, and it continues while you live there. New buyers miss it more often than anyone: check your first bill.
Three state examples
- Texas takes $140,000 off the value for school district taxes on a homestead, and another $60,000 for owners 65 or older or disabled (both raised by voters in November 2025). School taxes are also frozen at the level of the year you turn 65.
- Florida takes up to $50,000 off a homestead’s assessed value: the first $25,000 applies to all taxes and the second $25,000 (on value between $50,000 and $75,000) to non-school taxes. On a $400,000 home at Florida’s typical 0.75%, applying $50,000 to every levy would cut the bill from $3,000 to $2,625; the real saving is a little less because of the school-tax rule.
- California gives a $7,000homeowners’ exemption. Its bigger protection is Proposition 13, which limits the basic rate to 1% of assessed value plus voter-approved debt, and caps yearly rises in assessed value at 2% until the home is sold.
Exemptions in the calculator
The calculator applies every exemption to the whole rate. Where an exemption covers only some levies, such as Texas’s school exemption, use the mill rate method and enter the school rate on its own, or enter a smaller exemption to get the same saving.
Senior, veteran and disability relief
Most states offer extra help to some owners. The common types are:
- Senior exemptions: a larger exemption from age 65, sometimes tied to income.
- Freezes: the assessed value or the tax stays at the level of the year you qualify.
- Circuit breakers: a credit or rebate when the tax is a high share of your income.
- Deferrals: the tax is postponed until the home is sold, with interest.
- Veteran exemptions: partial or full exemptions for disabled veterans and their surviving spouses.
Enter exemptions under More options and credits as a dollar amount. The county assessor’s website lists what is available and how to apply.
Assessment caps and freezes
Many states limit how fast assessed value, or the total tax levy, can grow. California caps yearly increases at 2% and Florida’s Save Our Homes rule caps homesteads at 3% (or inflation, if lower). Under a cap, long-time owners can pay far less than new neighbors in identical houses.
The cap usually ends when the home sells. The buyer is assessed at market value, which brings us to the most common budgeting mistake.
Buying a home: the reassessment trap
A listing shows the seller’s last tax bill. That bill may include the seller’s homestead exemption, senior freeze or years of capped growth. After you buy, the home is often reassessed at the price you paid, and your bill can jump.
Budget from the purchase price times the local effective rate, not the seller’s bill. Our mortgage calculator adds the result to your monthly payment, and the closing cost calculator shows the tax you prepay into escrow at closing.
Escrow and your mortgage payment
Most lenders collect property tax with your monthly payment and hold it in an escrow account, then pay the bill when it is due. On a $3,560 tax bill that is $297 a month. Federal rules (RESPA) let the servicer keep a cushion of up to two months’ worth, $593 here, to cover increases.
The servicer reviews the account once a year. If the tax rose, you get a shortage notice and a higher payment. This is the main reason a fixed-rate mortgage payment changes.
How the bill grows
If a home’s value rises 3% a year and the rate stays the same, a $3,560 bill becomes $4,784 after ten years. At 2% a year it becomes $4,340. In practice, local governments often lower rates when values jump, and raise them when budgets need more, so bills track spending more than prices.
Appealing your assessment
If your assessed value looks too high, you can appeal. The steps are similar everywhere:
- Check the notice for errors: square footage, bedrooms, lot size, a garage you don’t have.
- Find three to five recent sales of similar homes nearby that sold for less.
- File by the deadline on the notice, often 30 to 60 days after it is mailed.
- Attend an informal review or a hearing before the local board.
Appeals are free in most places. You can appeal the value, not the rate.
Deducting property tax
Property tax on your home is deductible on your federal return only if you itemize. It counts toward the state and local tax (SALT) deduction, which also includes state income or sales tax and is capped. With the 2026 standard deduction at $16,100 single and $32,200 for married couples, most homeowners no longer itemize. Our federal income tax calculator shows whether itemizing helps you.
The property tax year
- Valuation dateOften January 1
The assessor values the home as of a fixed date.
- SpringAssessment notices
Check the value and exemptions; the appeal window opens.
- SummerRates set
Local bodies adopt budgets and tax rates.
- Fall or winterBills due
Some places bill once a year, others in two or four installments.
Dates vary by state and county. Some places bill in arrears, so a bill paid this year may cover last year.
Common mistakes
- Budgeting from the seller’s bill instead of the purchase price.
- Never applying for the homestead exemption.
- Comparing headline mill rates between counties with different assessment ratios.
- Missing the appeal deadline on the assessment notice.
- Forgetting that an escrow shortage raises the mortgage payment.
Using the calculator well
- Enter the home’s value and pick your state for a typical rate.
- If you have your bill, switch to the mill rate method and enter the total mills and the assessment ratio.
- Add your homestead exemption, and any senior or veteran exemption or credit under More options.
- Check the state comparison and the 10-year view.
Weighing renting against owning? Our rent affordability calculator is a good next step.
Key numbers
| Item | Figure |
|---|---|
| US typical effective rate (Census Bureau, 2024) | about 0.89% of value |
| Highest state rates | Illinois 1.92%, New Jersey 1.89%, Connecticut 1.66% |
| Lowest state rates | Hawaii 0.27%, Alabama 0.38%, Arizona and Idaho 0.43% |
| One mill | $1 per $1,000 of taxable value |
| Texas school homestead exemption | $140,000, plus $60,000 at 65 or disabled |
| Florida homestead exemption | up to $50,000 |
| California homeowners' exemption | $7,000 |
| Escrow cushion (RESPA) | up to 2 months of payments |