How to Calculate Property Tax

Local governments look at each property's value to determine property tax bills.
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Calculating your own property tax bill helps you plan and budget for the upcoming annual expense. A basic formula helps you determine the amount you likely will owe. Your local government's bill may vary from your estimate and it changes yearly after recurring value re-assessments. You'll need to know your municipal tax rate and assessed value.

Find Out the Tax Rate

Property tax rates vary by area and are subject to change depending on your tax district's financial needs. Contact the tax assessor or check your tax authority's website to determine the current tax rate.

Multiply by Assessed Value

The most basic way to calculate your tax bill is to multiply the general tax rate by your home's assessed value. Because assessed value can change annually, you need your most recent assessment value. Tax authorities have different methods for figuring out assessed value and your home's current market value may not match the tax-assessed value. That's because some areas use a percentage of the market value, rather than full market value, or assess value every three to four years rather than annually. Contact your municipal tax authority to find your current assessed value.

Examples of Estimates

In New Jersey, for example, where 100 percent of a home's market value is the assessed value, you multiply the general tax rate -- .03758 (as of 2014) -- by the home's value. A $300,000 home, therefore, would yield an annual tax bill of $11,274. The example's formula is 300,000 * .03758.