Property Tax
Definition and meaning of Property Tax in real estate.
Property tax is an ad valorem tax levied by local governments on real estate owners based on the assessed value of their property.
In more detail
Local municipalities, counties, and school districts use these tax revenues to fund public services like schools, road maintenance, and police forces. The tax amount is calculated by multiplying the property's assessed value, which is determined by a local tax assessor, by the local tax rate.
Although property tax rules and assessment schedules vary by state and county, the taxes are typically billed annually or semiannually. Homeowners with mortgages often pay their taxes monthly into an escrow account managed by their lender to ensure the bill is paid.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Calculated as | Ad valorem (based on value) |
| Funds | Local public services |
| Payment frequency | Often monthly via escrow |
A homeowner receives an annual tax bill that is calculated by applying the local millage rate to the assessed value of their property, resulting in a payment that varies depending on their specific municipality.
Frequently asked questions
How is property tax calculated?
Property tax is calculated by multiplying the assessed value of the home, which is determined by a local government assessor, by the local millage or tax rate.
Can I appeal my property tax assessment?
Yes, homeowners can appeal their property tax assessment if they believe the tax assessor overvalued their home compared to similar properties in the area.
Related terms
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Sources & references
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