How to Calculate Property Tax

In order to appropriately budget to pay your property taxes each year, it helps to have a good estimate of how much you will be required to pay. The best way to come up with this estimate is to learn how to calculate your property tax as precisely as possible. To do so, you will need to gather some information about both your property and your local assessment rates.

Instructions

Difficulty: Easy

1. Find out the assessed value of your property, including both the land and the building itself. This amount reflects the estimated value of your property as determined by the official tax assessor and not how much you paid for it, how much you personally benefit financially from it or how much you estimate it is worth. Add the estimated values for the land and the building together, and work with this number as the total estimated value for your property in order to calculate your property tax.
2. Research the estimated property tax rates for the coming year. It may help to use previous year's tax rates and their variances as a guide. Many local governments provide access about property tax rates, average home values and estimates for property taxes on their individual websites.
3. Deduct any property tax exemptions that you qualify for from this total assessed value of your property. You may need to contact your local tax office to verify what deductions you are eligible to apply towards your property tax, as these tax exemptions vary by location. Common examples of people eligible for property tax exemptions are the disabled, the elderly over 65 years old and widows.
4. Multiply your new amount for the assessed value of your property by the estimated property tax rate percentage for the coming year for each taxing district your property falls under separately. Add up the amounts for each taxing district to calculate the total estimated amount you will be required to pay in property taxes.
5. Keep in mind that the amount you calculate is only an estimate and may vary significantly from the amount of property taxes you are required to pay. Official tax rates are not usually determined until the end of each fiscal year. To be safe, it is best to budget more than the estimated amount when planning to pay property taxes.

Tips & Warnings

• Hire a professional tax consultant to help you calculate property taxes if you own multiple properties or if you have difficultly understanding mathematical concepts.