How to Calculate Residential Property Taxes

Calculating Property Taxes

Every year, most Americans must pay taxes on everything from groceries to their property. While every municipality has their own process for assessing property taxes, the calculation is usually the same. Additionally, while most counties will send a bill with your tax liability amount, it is helpful to know how to calculate the number yourself. To do so you will need to determine your local property tax rate and multiply this rate (if any) by either the income the property produces or the value of the property.

Things You'll Need

• Calculator or spreadsheet

Instructions

1. Contact the local property assessor's office to receive the property tax rate for your area. You can also ask your real estate agent. You should receive a statement from the local tax assessor's office at least once a year detailing your tax liability. Let's say the current property tax rate is 7.5 percent.

2. Determine the method by which your county assesses property taxes. Most municipalities take a percentage of the land value, however, some take only a percentage of the income made from the property.

3. Calculate the amount if your county assesses taxes based on land value. Let's say the value of the land is $100,000. Multiply the land value by the county property tax rate. It is important to look this number up on a regular basis as it can change from year to year. The equation is $100,000 x .075 or $7,500.

4. Calculate property taxes if your county tax assessor assesses property taxes based on income. Let's say your property brings in $1000 every month from rent. Multiply this monthly amount by 12 for the yearly income. This equals $1000 x 12 = $12,000.

5. Multiply the annual income amount by the property tax rate. The equation is: $12,000 x .075 or $900.

References

• NYC: Calculating Your Annual Property Tax
• The Tax Foundation: How to Calculate Property Tax Liability