Skip to Content

How to Accurately Calculate Property Taxes

Businessperson Calculating Property Taxes on Calculator

Property tax estimates are crucial for financial planning, legal compliance, and real estate investment budgeting. They help property owners allocate funds, take in property value, assess investments wisely, and compare taxes across locations. Calculating property taxes really helps in decision-making, and financial management, assuring acquiescence and compliance with tax regulations.

Key Numbers to Know

To calculate the property tax for residential real estate, you first need to know and obtain particular vital numbers:

  • Fair Market Value: This means the value expressed in an open and competitive market where buyers and sellers can haggle and reach an agreement. Fair Market Value is a term most often used in real estate transactions, property assessments, and tax computations.
  • Assessed Value: Denotes the value assigned to a property for taxation purposes by a local tax assessor or property appraiser. It considers the property’s value based on market conditions, property characteristics, and similar transactions. It is used to compute property tax liabilities, with tax rates applied to the appraised value to measure the amount the property owner owes.
  • Mill Levy: The tax rate applied to a property’s estimated It is indicated in “mills,” with one mill equal to one-tenth of a cent. The local taxing authority sets the mill levy and signifies the tax amount per dollar of the measured value.

With these numbers in hand, you can now properly calculate your property tax.


How to Calculate Property Tax

The formula to calculate property tax is like this: Property Tax = Assessed Value × Tax Rate.

Calculate property taxes by multiplying the assessed value by the tax rate set by the local taxing authority. For example, if a property’s estimated value is $200,000 and the mill levy for your area is 4%, the property tax you will likely pay yearly is about $8,000.


Alternative Methods

Trying to find local tax assessors or municipality websites is a very quick way to find property tax amounts without going through the usual calculating process. Property tax lookup tools are normally available on these websites, bestowing users the chance to search for property tax information by inputting the property address.

These internet systems always make certain of accuracy and lend pertinent information such as assessed value, tax rate, and exemptions or deductions. Although, not all jurisdictions tender this service or have the most current systems, so for the most accurate and up-to-date property tax information, contact the local tax assessor’s office personally.

According to the property address and sales price, online property tax calculators relatively estimate the yearly property tax. These evaluations may not perfectly represent your property tax liability cause of unacknowledged exemptions, deductions, and additional appraisals.

Discuss with local tax authorities or professionals for correct and accurate property tax information. Online calculators can give a starting point for projecting your property tax liability, helping you to make wise informed financial decisions, budget, and analyze house affordability.


Real Property Management Diamond proffers investors, such as you, market analyses and other tools to foster optimum profitability of your properties and invest more assuredly in your next income property. Contact us today or give us a call at 302-313-7700 to find out more about what we have to offer.


Originally Published on May 21, 2021

We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.

The Neighborly Done Right Promise

The Neighborly Done Right Promise ® delivered by Real Property Management, a proud Neighborly company

When it comes to finding the right property manager for your investment property, you want to know that they stand behind their work and get the job done right – the first time. At Real Property Management we have the expertise, technology, and systems to manage your property the right way. We work hard to optimize your return on investment while preserving your asset and giving you peace of mind. Our highly trained and skilled team works hard so you can be sure your property's management will be Done Right.

Canada excluded. Services performed by independently owned and operated franchises.

See Full Details