how property taxes are determined
property taxes are critical to funding the operations of municipal and other local government entities not all states levy income taxes but all states do levy property taxes property taxes are often assessed by more than one government entity for example a single property may be assessed for both municipal and county taxes government entities set mill rates based on the total value of property within the entity s jurisdiction to provide the necessary tax revenue to cover projected expenses in their annual budgets this includes things such as infrastructure police and emergency services parks and public schools for this reason and also because of fluctuating real estate values a tax assessor typically updates the taxable value of the property annually mill rates will usually vary for different types of property such as residential commercial or industrial properties property tax is an ad valorem tax which means it is based on value the assessed tax value of the property is calculated using local real estate data and is usually a percentage of a property s fair market value determined by multiplying the property s market value or appraisal value by an assessment ratio established by the local taxing authority some states have a homestead provision that exempts a specified dollar amount of a property s market value from assessment for property taxes for example in a state with a 50 000 homestead provision only 150 000 of a 200 000 home would be subject to property taxes 3the assessed tax value may be either higher or lower than a property s actual market value if you believe that your property has been assessed at an unreasonably high value you can request a reassessment 