Property Taxes 101
Property tax is an ad valorem tax paid by an individual or other legal entity for an owned property. It is usually calculated by a local government where the property is located and paid by the owner of the property.
How It's Calculated
The tax is based on the assessed value of your property, which includes both the land and any structures on it. This assessed value is often different from the market value (what you could sell it for).
Millage Rate
Tax rates are often expressed in "mills." One mill represents $1 in tax for every $1,000 of assessed value. So, a millage rate of 20 mills equals a 2% tax rate.
Escrow Accounts
Most homeowners pay their property taxes monthly as part of their mortgage payment. The lender holds these funds in an escrow account and pays the tax bill on your behalf when it's due. This prevents you from getting hit with a massive bill once a year.