Answer: Enter your values and the Property Tax Calculator returns the exact result instantly — formula, worked example, and a plain-English explanation are included below the tool.
Estimate your annual property tax
Property tax is a tax on real estate, levied by local governments — counties, cities, school districts, and special districts — and it is usually their single largest revenue source. Rates vary dramatically by state. New Jersey has the highest average effective rate at 2.49% of home value, while Hawaii has the lowest at 0.28%. The US average sits near 1.1%. Your actual bill depends not just on your state but on your specific county, city, school district, and special assessment districts, which is why two identical houses a mile apart can carry very different taxes. The figures below are approximate effective averages as compiled by the Tax Foundation; treat them as planning estimates, not quotes.
| State | Avg. Effective Rate | Annual Tax on $400K Home | Notes |
|---|---|---|---|
| New Jersey | 2.49% | $9,960 | Highest average effective rate |
| Illinois | 2.27% | $9,080 | High rates, large assessment variations |
| Texas | 2.18% | $8,720 | No state income tax; property tax carries the load |
| New York | 1.03% | $4,120 | NYC and upstate differ sharply |
| California | 0.99% | $3,960 | Capped by Prop 13 at 1% + voter add-ons; reassessed on sale |
| Florida | 0.77% | $3,080 | Homestead exemption caps assessed-value growth |
| Alabama | 0.49% | $1,960 | Among the lowest effective rates |
| Hawaii | 0.28% | $1,120 | Lowest rate, but high home values offset it |
Property tax follows a simple chain: assessed value × assessment ratio × tax rate = tax owed. First, the local assessor estimates your property's market value. Second, many jurisdictions apply an assessment ratio — the fraction of market value that is actually taxable. For example, if a home is worth $300,000 and the assessment ratio is 40% (as used in Delaware and, historically, in several other jurisdictions), the assessed value is $120,000. Some places, like California under Proposition 13, instead cap the assessed value's growth (no more than 2% per year) and reset it to market value only when the property sells. Third, the tax rate — often called a millage rate or mill rate — is applied to the assessed value. One mill equals $1 of tax per $1,000 of assessed value, so a 25-mill levy on $120,000 of assessed value produces $3,000 per year. Many tax bills sum several millage rates: a school-district rate, a county rate, a city rate, and smaller levies for fire, library, and other special districts.
Worked example: a home with a $300,000 market value in a jurisdiction with a 40% assessment ratio and a total levy of 30 mills pays 300,000 × 0.40 = $120,000 assessed value, then 120,000 × (30 / 1,000) = $3,600 per year, or $300 per month. Where the full market value is taxed directly (as this calculator assumes), simply multiply value by the effective rate: $400,000 × 1.1% = $4,400 per year. The "effective rate" — total tax divided by true market value — is what makes state-to-state comparisons fair, and it is the number used in the table above.
Most states reduce taxable value through exemptions. Homestead exemptions — for a primary residence — are the most common and can shave tens of thousands of dollars off assessed value; Florida's also caps annual assessed-value increases. Senior, veteran, and disability exemptions exist in most states, and about two-thirds of states offer some property tax relief through circuit-breaker credits that cap taxes as a share of income. If you believe your assessment is too high, you can appeal it: most jurisdictions have a formal appeals window (often 30–60 days after assessment notices), and successful appeals typically require evidence of comparable sales at lower prices. Improvements — a new kitchen, an addition, a pool — raise assessed value, while deferred maintenance can support a lower one. Check your county assessor's website for exemption applications and appeal deadlines; unclaimed exemptions are among the most common ways homeowners overpay.
If you have a mortgage, your lender almost certainly collects property tax as part of your monthly payment, held in an escrow account and paid to the county on your behalf. Lenders prefer this because unpaid property tax creates a tax lien that outranks the mortgage. Escrow means your effective monthly housing cost includes 1/12 of the annual tax bill, plus a cushion — federal rules generally allow lenders to keep up to two months of escrow payments as a buffer. When taxes rise, your escrow payment rises, and the lender may send a shortage bill or spread it over the coming year. If your equity exceeds 20%, you may be able to waive escrow and pay taxes yourself — but you must budget for often-large semiannual or quarterly bills, and missed payments can trigger forced escrow or foreclosure.
How do I calculate my property tax? Multiply your home's value by your effective tax rate. More precisely: market value × assessment ratio = assessed value, then assessed value × millage rate = annual tax. A $400,000 home at a 1.1% effective rate owes about $4,400 per year.
Which state has the highest property tax? New Jersey, with an average effective rate of 2.49% of home value. Illinois (2.27%) and Texas (2.18%) follow. Hawaii has the lowest average rate at 0.28%, though its high home values mean bills can still be substantial.
What is a millage rate? A mill is $1 of tax per $1,000 of assessed value. A total levy of 25 mills on $200,000 of assessed value produces $5,000 per year. Tax bills usually stack several millage rates from the school district, county, city, and special districts.
Can I lower my property tax bill? Yes. Claim every exemption you qualify for (homestead, senior, veteran, disability), check your assessment for errors, and appeal during your jurisdiction's appeal window if comparable homes sold for less.
Does property tax change when I buy a home? Usually yes. Many states reassess to full market value on sale — in California, for example, the assessed value resets to the purchase price under Proposition 13. Your bill can jump significantly from the seller's, so budget on the new assessment, not the seller's history.