Understanding US Property Taxes
Property taxes are levied by local governments (counties, municipalities, and school districts) on real estate you own. They are typically assessed annually based on the assessed value of your property and the local mill rate or tax rate. Property taxes fund local services such as schools, fire departments, roads, and public infrastructure.
How Assessed Value Works
Assessed value is set by your local tax assessor and may differ significantly from your home's market value. Some jurisdictions assess at 100% of market value; others use a lower ratio (e.g., 80%). Check your property tax bill or county assessor's website to find your official assessed value and current tax rate.
SALT Deduction and Escrow
If you itemize deductions on your federal return, you can deduct up to $10,000 in combined state and local taxes (SALT cap), including property taxes. Most mortgage lenders require monthly escrow contributions so property taxes are collected throughout the year and paid on your behalf.
Frequently Asked Questions
About 1.1% nationally, but rates range from under 0.3% to over 2.5% depending on your state and county.
By your local tax assessor — often as a percentage of market value. Check your county assessor's website for the exact ratio.
Yes, up to $10,000 of combined state and local taxes (SALT cap) can be deducted if you itemize on your federal return.