If you pay property taxes, you've likely encountered the term "millage rate." While the term is often used interchangeably with tax rates, there are some key differences to understand. To help you better navigate the world of property taxes, here is an overview of the basics of understanding millage rates:
What does “millage” mean?
Millage rate, also called mill rate, comes from the Latin word for "one thousandth." Therefore, the millage rate is based on the amount per every one thousand dollars of property value. Multiple millage rates go into calculating property tax amounts, including those from various local agencies.
For example, public school boards have their millage rates they use to determine local school taxes based on the overall value of district property values. Other examples of taxing authorities with their millage rates include emergency services, community colleges, cities and counties.
Why does millage rate matter?
Millage rates are a key component in deciding the amount you owe on your property taxes. To calculate individual property taxes, you take the property's assessed value and multiply it by the millage rate or rates. Here is the basic formula:
Assessed value x Millage rate
For example, if the assessed value of a home equals $135,000 and the local millage rate is 7% (70/1000), the estimated property tax amount comes to $9,450.
Because this formula can include multiple different rates, it can be tricky to determine exactly how much you'll owe in property taxes. However, you can usually find an individual property's millage rate on the deed. Using this rate and your property's tax-assessed value, you'll be able to find an estimation of your annual tax responsibility.
About the Author
Rick Herrick & Paula Farnsworth Bertone
We would like to take a moment to introduce ourselves. Our names are Rick Herrick and Paula Farnsworth Bertone, we have been working together as partners in the real estate industry for approximately 22 years as appraisers, consultants, and agents, combined we have over 59 years of real estate experience. We provide services for Buyer’s, Seller’s, Banks, and Attorneys.
We would love to assist you. Whether you're in the research phase at the beginning of your real estate search or you know exactly what you're looking for, you'll benefit from having a real estate professional by your side. We would be honored to put our real estate experience to work for you.
