Property taxes are a major component of homeownership costs — and they vary widely depending on location, local government budgets, and property values.
How are property taxes calculated?
In most cases:
Assessed Value × Local Tax Rate = Annual Property Tax
So if your home is assessed at $250,000 and your tax rate is 1.5%, you’d owe $3,750 per year.
These taxes are usually collected monthly as part of your mortgage escrow and cover:
- Public schools
- Police and fire services
- Infrastructure like roads and parks
- City or county administrative functions
Pro Tip: Don’t assume property taxes are fixed. They can increase as property values rise or when local levies are passed. Before buying, ask your real estate agent for recent tax bills or check the local assessor’s site.
