How property tax is estimated
Annual tax = (home value − exemptions) × effective tax rate
Monthly = annual tax ÷ 12
An effective rate expresses the tax actually paid as a percentage of market value. It folds in assessment ratios, local levies and the typical mix of exemptions, which makes it the fairest way to compare states. Your actual bill is set by your county or city: the assessed value times the local millage rate, minus exemptions.
Where the state rates come from
For each state we divide the median real estate taxes paid (Census table B25103) by the median value of owner-occupied homes (table B25077), both from the U.S. Census Bureau’s 2024 American Community Survey 1-year estimates. Nationally that is $3,211 ÷ $360,600 = 0.89%. This median-to-median method is a standard approximation; it is not the rate of any particular home. See every state in the property tax by state table.
Worked example
A $350,000 home in Texas, where the 2024 effective rate is 1.31% ($4,108 median tax ÷ $313,200 median value):
| Annual property tax (350,000 × 1.312%) | $4,592 |
|---|---|
| Monthly (added to your mortgage payment) | $382.67 |
Why your bill may differ
- Local rates vary within a state, sometimes by a factor of two or more between counties.
- Assessed value is not market value in many places; some states cap annual assessment increases for existing owners, so a new buyer can pay more than the previous owner did.
- Exemptions for homesteads, seniors, veterans and disabilities can reduce the taxable value.
- The median tax figure from the Census is top-coded at $10,000, which slightly understates rates in the highest-tax areas.
Frequently asked questions
What is the average property tax rate in the U.S.?
Using the Census Bureau’s 2024 ACS, the median real estate tax paid ($3,211) divided by the median home value ($360,600) gives an effective rate of about 0.89%.
Which state has the highest property tax rate?
By this measure, Illinois (1.92%) and New Jersey (1.89%) are highest, and Hawaii (0.27%) and Alabama (0.38%) lowest, in the 2024 data.
Is property tax included in my mortgage payment?
Usually, if you have an escrow account: your servicer collects one-twelfth of the annual tax each month and pays the bill for you.