Property Tax: What Homeowners Need to Know in 2026
How Property Tax Is Calculated
Property tax is calculated as Assessed Value x Mill Rate / 1,000. The assessed value is determined by your county assessor and is typically 80% to 100% of the market value. A mill rate is the amount per $1,000 of assessed value. For example, a mill rate of 15 means $15 per $1,000 of assessed value.
Example: A $400,000 home with a 1.5% effective rate pays $6,000 in annual property taxes.
Highest Property Tax States
| State | Effective Rate | Avg Annual Tax |
|---|---|---|
| New Jersey | 2.23% | $7,468 |
| Illinois | 2.08% | $4,062 |
| New Hampshire | 1.93% | $5,154 |
| Connecticut | 1.79% | $5,103 |
| Vermont | 1.71% | $3,086 |
| Nebraska | 1.70% | $2,730 |
Lowest Property Tax States
| State | Effective Rate | Avg Annual Tax |
|---|---|---|
| Hawaii | 0.27% | $1,854 |
| Alabama | 0.40% | $628 |
| Colorado | 0.51% | $2,170 |
| South Carolina | 0.53% | $1,002 |
| Nevada | 0.55% | $1,687 |
| Delaware | 0.57% | $1,495 |
Homestead Exemptions
Many states offer a homestead exemption that reduces the taxable value of your primary residence. Florida exempts up to $50,000 of value for primary residences. Texas increased its homestead exemption to $100,000 in 2023. These exemptions can significantly reduce your annual property tax bill.
How to Appeal Your Assessment
If you believe your property is overvalued, follow these steps to appeal:
Step 1: Review your assessment notice carefully for errors in square footage, number of bedrooms, or lot size.
Step 2: Gather comparable sales data (comps) showing similar properties in your area that sold for less than your assessed value.
Step 3: File an appeal with your county assessor's office before the deadline (deadlines vary by state).
Step 4: Attend the hearing and present your evidence. Success rates average 30-40%.
Tips to Lower Your Property Tax Bill
Apply for all exemptions you qualify for (homestead, senior, veteran, disability). Check your assessment for errors every year. Appeal within the deadline if your assessment seems too high. Use our property tax calculator to see how your rate compares nationally.
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