Property taxes fund local schools, emergency services, and infrastructure, and they represent a significant ongoing cost of homeownership. Annual rates range from under 0.3% of assessed value in Hawaii to over 2.4% in New Jersey, where a median-priced home can carry a property tax bill exceeding $9,000 per year. In Texas, where there is no state income tax, property tax rates of 1.5 to 2.5% effectively serve as a substitute revenue source for the state and local governments.
How assessed value is determined
Each county assesses properties on its own schedule, some annually and some every few years. The assessed value is often a percentage of market value, called the assessment ratio, which varies by jurisdiction. Your tax bill equals the assessed value multiplied by the local mill rate. When home prices rise sharply, as they did across the US from 2020 to 2023, assessed values lag behind but eventually catch up, causing bills to spike even if rates stay flat.
Exemptions and how to appeal your assessment
Homestead exemptions reduce taxable value for primary résidence owners, often by $25,000 to $50,000 off the assessed amount. Veterans, seniors, and disabled homeowners may qualify for additional réductions. If you believe your assessment is too high, most jurisdictions allow you to file a formal appeal within 30 to 90 days of receiving your notice. Bring comparable sales data that supports a lower value. A successful appeal on a $400,000 assessment in a market with a 1.8% rate saves roughly $720 per year for as long as the lower value holds.
