Annual property tax by state rate or custom rate
Last reviewed: May 2026
A property tax calculator estimates your annual and monthly property tax based on your home's assessed value and local tax rate. Property taxes are one of the largest ongoing costs of homeownership — often $200–$1,000+ per month depending on location — yet many buyers focus exclusively on the mortgage payment and are surprised by the tax bill. Property taxes fund local schools, roads, police, fire departments, and public services.1
The formula is straightforward: Annual Tax = Assessed Value × Tax Rate (mill rate). However, assessed value often differs from market value — many jurisdictions assess at 80–100% of market value, and some apply homestead exemptions that reduce the taxable portion. A home with a $400,000 market value assessed at 85% ($340,000) with a 1.5% tax rate pays $5,100/year ($425/month).2
| State | Avg Effective Rate | Tax on $400K Home | Monthly |
|---|---|---|---|
| New Jersey | 2.23% | $8,920 | $743 |
| Illinois | 2.08% | $8,320 | $693 |
| Texas | 1.60% | $6,400 | $533 |
| California | 0.71% | $2,840 | $237 |
| Florida | 0.80% | $3,200 | $267 |
| Hawaii | 0.27% | $1,080 | $90 |
Rates vary dramatically — from 0.27% in Hawaii to over 2.2% in New Jersey. Within a single metro area, rates can differ 50%+ between municipalities. States without income tax (Texas, Florida) often have higher property taxes to compensate. Some states cap annual assessment increases (California's Prop 13 limits increases to 2%/year) which benefits long-term owners but creates disparities between neighbors. Always verify the actual rate for a specific property before purchasing.3
If your assessed value seems too high, you can appeal. Gather comparable sales data (similar homes sold recently for less), note any property defects or issues the assessor may not have accounted for, and file an appeal within the deadline (typically 30–90 days after assessment notice). Success rates vary, but homeowners who appeal save an average of $500–$1,500/year when successful. The process is usually free and can be done without an attorney.4
| State | Effective Rate | Tax on $400K Home | Monthly Cost |
|---|---|---|---|
| New Jersey | 2.23% | $8,920 | $743 |
| Illinois | 2.07% | $8,280 | $690 |
| Texas | 1.68% | $6,720 | $560 |
| California | 0.71% | $2,840 | $237 |
| Florida | 0.86% | $3,440 | $287 |
| Colorado | 0.51% | $2,040 | $170 |
| Hawaii | 0.28% | $1,120 | $93 |
Understanding the difference between assessed value and market value is critical for property tax accuracy. Market value is what a willing buyer would pay — determined by comparable sales, condition, and location. Assessed value is the taxing authority's valuation for tax purposes, which may differ significantly. Many jurisdictions assess at a fraction of market value: Cook County, Illinois assesses residential property at 10% of market value; California's Proposition 13 limits assessed value to the purchase price plus a maximum 2% annual increase regardless of actual appreciation. This means two identical houses next door to each other can have vastly different property tax bills if one was purchased recently at market rates and the other has been owned for decades.
Assessment ratios, millage rates, and exemptions create a complex tax calculation that varies by jurisdiction. The effective tax rate — actual taxes paid divided by market value — is the most useful comparison metric across states and counties. When you purchase a home, request the current property tax bill and ask whether a reassessment will occur after sale. In states without assessment caps, your property tax could increase substantially if the current owner's assessed value is significantly below market price.
Most states offer homestead exemptions that reduce the taxable value of your primary residence. Texas provides a $100,000 school district exemption, meaning the first $100,000 of assessed value is exempt from school taxes. Florida's homestead exemption removes $50,000 from assessed value and caps annual assessment increases at 3% for homesteaded properties. Senior citizens, veterans, disabled individuals, and surviving spouses often qualify for additional exemptions that can reduce property taxes by 25% to 100% depending on the state and circumstance. These exemptions are not automatic — you must apply, and many homeowners leave money on the table by failing to file. Check your county assessor's website for available exemptions and application deadlines, which are often in early spring.
Property tax appeals succeed more often than most homeowners expect — studies suggest that approximately 30% to 40% of appeals result in a reduced assessment. The process typically involves filing a formal appeal with the county board of review within a 30 to 90-day window after assessment notices are mailed, providing comparable sales data showing your property is overvalued, and attending a hearing or submitting written evidence. Key evidence includes recent sales of comparable properties at lower prices, documentation of property defects or conditions that reduce value (needed repairs, environmental issues, noise or traffic problems), and errors in the property record (incorrect square footage, wrong number of bedrooms or bathrooms, missing condition notes).
Professional property tax appeal firms handle the process for a contingency fee — typically 25% to 50% of the first year's savings. For high-value properties where a successful appeal saves thousands per year, the fee is worthwhile. For modest reductions, self-representation is straightforward. The worst outcome of an appeal is denial — in most jurisdictions, the assessment cannot be increased as a result of your appeal. Document everything with photographs, comparable sales printouts, and written condition reports to build the strongest possible case.
Most mortgage lenders require property tax payments through an escrow account — the lender collects a monthly amount as part of your mortgage payment and pays the property tax bill on your behalf. The monthly escrow amount equals your annual tax bill divided by 12, plus a cushion of two months' payment that the lender is allowed to hold. When property taxes increase, your monthly mortgage payment increases correspondingly at the next escrow analysis. This can surprise homeowners who expect a fixed monthly payment — while the principal and interest portion of a fixed-rate mortgage is constant, the escrow portion fluctuates with tax and insurance changes. Escrow shortages occur when actual taxes exceed the estimated amount, triggering either an increased monthly payment or a lump-sum shortage payment. Use our Mortgage Payment Calculator to estimate total monthly housing costs including property tax escrow.
Property taxes are deductible on federal income taxes for taxpayers who itemize, subject to the $10,000 State and Local Tax (SALT) cap introduced by the Tax Cuts and Jobs Act. The SALT cap limits the combined deduction for state income tax (or sales tax), local income tax, and property tax to $10,000 per return ($5,000 for married filing separately). In high-tax states where property taxes alone approach or exceed $10,000, the deduction cap means additional property tax provides no federal tax benefit. This has implications for home buying decisions in high-tax areas — a larger, more expensive home generates higher property taxes that may produce no additional tax deduction. For complete tax impact analysis, see our Tax Calculator.
Beyond the base property tax rate, many properties are subject to special district taxes and assessments that increase the total tax burden. Common special districts include school bonds (voter-approved debt for school construction), fire protection districts, water and sewer districts, community facilities districts (Mello-Roos in California), and business improvement districts. These additional assessments can add 0.5% to 1.5% on top of the base tax rate, significantly impacting total housing costs. A property in a community facilities district might pay the standard 1.1% county rate plus a 0.8% Mello-Roos assessment, totaling 1.9% — nearly double the base rate. Special assessments often have expiration dates tied to bond repayment schedules, so they may decrease over time. When purchasing a home, request the full property tax bill (not just the base amount) to understand your complete obligation. For total homeownership cost analysis, see our Home Affordability Calculator.
Property taxes are not static — they change as assessed values increase, tax rates adjust, and new bonds or levies are approved by voters. Nationally, property taxes have increased an average of 3% to 5% per year over the past two decades, outpacing general inflation. In rapidly appreciating markets, reassessments can trigger sharp increases: a home that doubled in value over five years may see its property tax double at the next reassessment. States without assessment caps offer no protection against these increases. Even in states with caps (California's 2% maximum annual increase, Florida's 3% for homesteaded properties), the protection is lost when the property sells and is reassessed to market value. Budget for annual property tax increases of at least 3% when planning long-term housing costs. Use our Inflation Calculator to understand how rising property taxes compound over your expected ownership period.
→ Check the actual rate for specific properties. Tax rates vary between neighboring towns. Always verify before making an offer.
→ Apply for homestead exemption. Most states offer this for primary residences but it's not automatic — you must apply, usually through the county assessor.
→ Budget for annual increases. Plan for 2–5% property tax growth per year in most markets.
→ Consider appealing. If your assessed value seems high, gather comparable sales data and file an appeal. Success saves $500–$1,500/year on average.
See also: Home Affordability · Mortgage Calculator · Closing Costs · Tax Estimator