To learn how to calculate property tax, you need one formula: property tax = (assessed value minus exemptions) × tax rate. The assessed value is the dollar figure your local assessor puts on the home, exemptions shave part of it off, and the rate is what every overlapping district (county, city, school district, special districts) levies on what’s left. States dress that formula up differently, which is why a Connecticut bill, a Texas bill and a California bill look nothing alike.
Below: the formula in five steps, the three ways rates are written, and worked examples from three very different state systems using 2026 rates and rules from state revenue agencies.
The Property Tax Formula, Term by Term
Every U.S. property tax bill comes from the same chain: market value, then assessed value, then taxable value, then the bill. The Florida Department of Revenue states it about as cleanly as anyone: just value minus assessment limits equals assessed value; assessed value minus exemptions equals taxable value; taxable value times the millage rate equals the total owed.
- Market value is what the home would likely sell for on the valuation date. Florida calls it “just value,” Texas calls it “appraised value.”
- Assessed value is the value the levy is based on. It may equal market value, a fixed percentage of it (the assessment ratio), or a capped figure that trails it.
- Exemptions are dollar amounts or percentages removed from assessed value, such as a homestead exemption for a primary residence.
- Taxable value is assessed value after exemptions. This is the number the rate hits.
- Tax rate is the combined rate of every local unit that levies on your parcel, set each year once budgets are adopted.
For a deeper look at the first two terms, see our guide to assessed value vs market value.
How to Calculate Property Tax in 5 Steps
Use these steps to calculate your property taxes in any state:
- Find the market value. Use the value on your latest assessment notice, not a listing site estimate, because the assessor’s number is what gets billed.
- Apply the assessment ratio or cap. Multiply by your state’s ratio (Connecticut uses 70%) or apply the annual cap if one limits your assessed value.
- Subtract exemptions. Homestead, senior, veteran and disability exemptions come off here. Some apply only to certain districts, so track them per line.
- Convert the rate to a decimal. Divide mills by 1,000, a rate per $100 by 100, or a percentage by 100.
- Multiply and add up every district. Taxable value times each rate, then sum the lines. Add any flat special assessments listed separately.
Step 3 is the one people get wrong most often when they check our state calculators against their bill. An exemption that only applies to school levies can’t be subtracted from the county line, and doing so understates the bill by hundreds of dollars.
Mill Rate, Percentage or Rate per $100: Converting Any Tax Rate
A mill rate (or millage rate) is the amount of levy per $1,000 of assessed value. Connecticut’s Office of Policy and Management defines one mill as $1 for every $1,000 of assessment, so the math is (assessment × mill rate) ÷ 1,000. The same rate can be written three ways:
| Format | Example | Decimal to multiply by | Common in |
|---|---|---|---|
| Mills (per $1,000) | 25 mills | 0.025 | Connecticut, Florida, Michigan |
| Per $100 of value | $2.50 per $100 | 0.025 | Texas, Tennessee, North Carolina |
| Percentage | 2.5% | 0.025 | California (1% base levy) |
One catch: each format applies to assessed value. A 25-mill levy in a state that assesses at 70% of market value costs you 1.75% of market value, not 2.5%.
Example 1: Connecticut, Where Mill Rates Meet a 70% Assessment Ratio
Connecticut law (CGS § 12-62a) sets every assessment at 70% of fair market value as of the town’s last revaluation. Towns then adopt a rate in mills. When we pulled the fiscal year 2027 rates (October 1, 2025 grand list) from the state’s open data portal in September 2026, the spread between towns was enormous. Take a home with a $400,000 market value, assessed at $280,000:
| Town | FY 2027 mills | Annual bill on a $280,000 assessment | Effective rate on $400,000 |
|---|---|---|---|
| Greenwich | 10.125 | $2,835 | 0.71% |
| Glastonbury | 33.73 | $9,444 | 2.36% |
| Hartford | 69.95 | $19,586 | 4.90% |
Glastonbury’s math: $280,000 × 33.73 ÷ 1,000 = $9,444.40. Same house, same state, and the Hartford owner pays almost seven times what the Greenwich owner does. Check the latest rates published by Connecticut’s Office of Policy and Management or run your numbers in our Connecticut property tax calculator.
Example 2: Texas, Full Market Value With a School Homestead Exemption
Texas appraisal districts value property at 100% of market value as of January 1, and local units adopt rates per $100 of value. After voters approved it in November 2025, the Texas Comptroller confirms school districts must exempt $140,000 of a residence homestead, plus another $60,000 for owners 65 or older or disabled. That exemption applies to the school levy only.
Example with a $400,000 homestead and illustrative rates of $1.00 per $100 for the school district and $0.90 per $100 for county, city and other units combined:
- School: ($400,000 − $140,000) × 0.0100 = $2,600
- Other units: $400,000 × 0.0090 = $3,600
- Total: $6,200, an effective rate of 1.55%
Without the homestead exemption the bill would be $7,600. A 65-year-old owner gets another $60,000 off the school line, worth $600 more at this rate. Texas also limits a homestead’s appraised value increase to 10% a year. Try your own figures in the Texas property tax calculator, and see our roundup of senior exemptions by state.
Example 3: California, Where Proposition 13 Caps Assessed Value
California doesn’t reassess to market value each year. Under Proposition 13, the 1978 constitutional amendment, the California State Board of Equalization explains that value resets only on a change in ownership or new construction, grows at most 2% a year after that, and faces a base levy of 1% plus whatever rate voter-approved bonds require. Owner-occupants get a $7,000 homeowners’ exemption.
Example: a home bought for $600,000 in 2018, assuming the full 2% factor every year (some years the inflation factor ran lower), and an illustrative 0.12% bond rate:
- Factored base year value for 2026: $600,000 × 1.028 = $702,996
- Less the $7,000 exemption: $695,996
- Multiply by 1.12%: $7,795
If that home is now worth $900,000, the effective rate is 0.87%. A neighbor who buys the identical house next door for $900,000 pays ($900,000 − $7,000) × 1.12% = $10,002, about 28% more for the same house. New buyers also get a supplemental bill covering the months between purchase and the next roll. Model it in our California property tax calculator.
Assessment Ratios and Caps That Change the Math
An assessment ratio is the percentage of market value that gets assessed; an assessment cap limits how fast assessed value can rise. Either one means you can’t just multiply your home’s price by the local rate.
| Jurisdiction | Rule | 2026 figure |
|---|---|---|
| Connecticut | Assessment ratio | 70% of market value |
| Cook County, Illinois | Residential ratio plus state equalizer | 10%, then × 3.0300 (final 2025 factor) |
| California | Prop 13 annual cap | 2% maximum |
| Florida | Save Our Homes cap (homestead) | 2.7% (lower of 3% or CPI) |
| Texas | Homestead appraisal cap | 10% a year |
The Cook County Assessor multiplies market value by 10% to get assessed value, then applies the state equalization factor to reach equalized assessed value (EAV) before exemptions and rates. Florida’s cap and its figures come from the Florida Department of Revenue, which also lists the 2026 homestead exemption: $25,000 off all levies plus up to $26,411 more off non-school levies. Our Illinois and Florida calculators handle both steps.
How to Read Your Property Tax Bill and Check the Math
Your bill already shows every input. Look for these lines:
- Assessed and taxable value, with each exemption itemized. A missing homestead exemption is the most expensive error you’ll find.
- One line per district (county, school, city, fire, library), each with its own rate. Multiply taxable value by each rate to verify.
- Special or non-ad valorem assessments: flat charges for things like stormwater or trash that aren’t based on value.
If you pay through a mortgage escrow account, the lender collects one-twelfth of the estimated annual amount each month alongside homeowners insurance, so a jump in the bill shows up as a higher payment after the next escrow analysis. At federal filing time, the IRS (Topic 503) lets itemizers deduct levies based on property value, within the 2026 state and local cap of $40,400; flat service charges don’t qualify.
To compare places fairly, use the effective property tax rate: annual bill ÷ market value × 100. It’s the only number that lines up a Connecticut mill rate against a Texas rate per $100. If your value looks wrong, our guide on how to lower property taxes covers the appeal process.
Now that you know how to calculate property tax, check your own home: pull your latest assessment notice, confirm every exemption you qualify for is listed, then enter the taxable value and your district’s current rate in your state’s calculator, such as the New Jersey property tax calculator. If the result differs from your bill by more than a few dollars, the gap is almost always a missing exemption or an unlisted special district.
Property Tax Calculation FAQ
How do you calculate property tax with a millage rate?
Multiply taxable value by the millage rate and divide by 1,000. A $250,000 taxable value at 20 mills equals $250,000 × 20 ÷ 1,000 = $5,000 a year. Add each district’s millage together first if your bill lists them separately.
Is property tax based on the purchase price?
In most states, no. It’s based on the assessor’s current market value estimate. California is the major exception: Proposition 13 sets assessed value at the purchase price and limits increases to 2% a year until the home sells again.
How do I find my property tax rate?
Check your latest bill or your county assessor or treasurer’s website, which lists the combined rate for your parcel’s district. State agencies such as Connecticut’s OPM also publish every town’s rate each year.