Property Tax Calculator 2025: How to Estimate Your Home Tax Bill
Property taxes fund schools, roads, police, and local services. Our Property Tax Calculator helps homeowners, buyers, and investors estimate annual and monthly tax using 2025 local rates, assessed value, and exemptions. This guide explains the formula, average rates by state, how assessments work, and strategies to reduce your bill legally.
How Property Tax Is Calculated
The standard formula:
- Assessed Value = Market Value × Assessment Ratio
- Taxable Value = Assessed Value − Exemptions
- Annual Tax = (Taxable Value ÷ 1,000) × Mill Rate
Example: $400,000 home, 85% ratio, $20 mill rate, $25,000 exemption:
Assessed = $340,000 → Taxable = $315,000 → Tax = ($315,000 ÷ 1,000) × 20 = $6,300/year
Average Property Tax Rates by State (2025)
| State | Avg Effective Rate | Median Annual Tax |
|---|---|---|
| New Jersey | 2.23% | $8,800 |
| Illinois | 2.11% | $4,900 |
| Texas | 1.68% | $4,100 |
| California | 0.74% | $4,700 |
| Florida | 0.82% | $2,400 |
| Hawaii | 0.27% | $2,000 |
Effective rate = annual tax ÷ home value. Source: ATTOM Data
Understanding Assessment Ratio
Most states assess below 100% of market value:
- California (Prop 13): Limited to 1–2% annual increase
- New York: Varies by county (40–100%)
- Texas: Typically 100%
Common Exemptions & Deductions
- Homestead: $25K–$100K off assessed value (FL, TX)
- Senior/Disabled: Additional $10K–$50K
- Veteran: Full or partial exemption in many states
- STAR (NY): Up to $1,000 credit
Mill Rate vs. Effective Rate
- Mill Rate: Nominal rate per $1,000 (e.g., 18.5 mills = 1.85% of assessed value)
- Effective Rate: Actual tax ÷ market value (more useful for comparison)
How to Find Your Mill Rate
Check your tax bill, county assessor website, or use our calculator with local data. Rates change annually based on budget needs.
Strategies to Lower Property Tax
- Appeal Assessment: If overvalued (60% success rate in some areas)
- Apply for Exemptions: Homestead, senior, green energy
- Monitor Reassessments: Challenge unfair jumps
- Move to Low-Tax State: HI, AL, LA under 0.5%
Property Tax and Mortgage Escrow
Lenders collect 1/12th monthly into escrow. Use our Mortgage Calculator to include tax in PMI.
FAQs
Is property tax deductible? Yes, up to $10,000 (SALT cap) if itemizing.
Do renters pay property tax? Indirectly through rent.
When are taxes due? Varies: annual, semi-annual, or quarterly.
Conclusion
Accurate property tax estimates prevent budget surprises. Use our 2025 Property Tax Calculator before buying, selling, or appealing. Pair with Mortgage Calculator for full housing costs. Calculate now and plan smarter!
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