How are property taxes calculated, and can you appeal them?

Property tax is calculated by multiplying the assessed value of your property by the local tax rate, sometimes expressed as a millage rate, then subtracting any exemptions you qualify for. The assessed value is determined by a local assessor and may or may not equal market value, since many jurisdictions assess at a fixed percentage of market value or cap how fast assessments can rise. Rates are set by the overlapping taxing bodies, county, city, school district, and special districts, which is why the total is a sum of several line items rather than one number.

Assessments are mass appraisals rather than individual valuations, produced by statistical models across thousands of properties, and they are wrong often enough that appeals are routine and frequently successful. Grounds for appeal include factual errors in the property record such as incorrect square footage, bedroom count, or lot size, comparable sales indicating a lower market value, and unequal assessment relative to similar nearby properties. The process usually starts with an informal review with the assessor's office, escalating to a formal board hearing, and in most places it is free or costs a nominal filing fee. Deadlines are strict and typically fall shortly after assessment notices are mailed, which is the most common reason people miss the opportunity.

Exemptions are the other underused lever. Homestead exemptions reduce the taxable value of a primary residence in most states and sometimes cap annual increases, and they generally must be applied for rather than being automatic. Additional exemptions commonly exist for seniors, veterans, people with disabilities, and agricultural use, with eligibility thresholds that are higher than people assume. Check what your jurisdiction offers and what you are actually receiving on your bill, since exemptions can silently lapse after a refinance or a change in title. And note that buying a home often triggers a reassessment to the purchase price, so the previous owner's tax bill is a poor guide to what you will pay.