Property Tax Exemption Calculator Explained

Reducing Property Taxes Property Tax Exemption Calculator Explained

Property Tax Exemption Calculator—How Does It Work?

Most U.S. citizens are obligated to pay property taxes, which aren’t exactly reasonably-priced. It is estimated that the average American taxpayer pays approximately $2,279 a year, with citizens in some states paying up to $7,800 annually.

You should pay your property taxes on time, but before you jump straight to it, you should learn how the tax assessors estimate your property and calculate your bill. By understanding how these processes work, you can prevent getting overcharged.

This article will break down the property tax assessment process and explain how the property tax exemption calculator works.

Understanding Property Tax Assessments

The first step to learning how to calculate your taxes is to understand how the property tax assessment process works.

Every jurisdiction has its tax assessor’s office that is in charge of scheduling and performing property tax assessments. How often they perform property evaluations is usually the same for every county in one state and can vary from once a year to once every two, three, or even eight years.

On the day of the evaluation, your local assessor comes to your property and determines its value based on the factors that include, but aren’t limited to:

  • Age
  • Size
  • Location
  • Land-to-property ratio
  • Overall condition of the property
  • The market value of neighboring properties
  • Permanent structures on the property and surrounding land

Local infrastructure projects involving gas, water, sewers, and anything else that the neighborhood benefits from can affect your property tax assessment value. These special assessments on property taxes are usually not tax-deductible.

How Does the Property Tax Assessment Calculator Work?

There are three aspects of calculating a property tax bill:

  1. Setting the property tax rate and calculating the mill levy
  2. Assessing the property’s value
  3. Determining reductions in taxable value from exemptions

Property Tax Rate

Each jurisdiction calculates the tax or mill levy separately, after which they combine all the mill levies to get the mill rate (property tax rate) for the whole region. A mill levy depends on the needs of each county, city, or school district. Each of these entities has the right and power to levy taxes against properties in their jurisdictions.

So, how are property tax rates calculated?

One mill represents one-tenth of one cent, so one mill for $1,000 of assessed property value would be $1.

Let’s say a county needs $1 million in tax revenue for its districts, and the total assessed property value is $100 million. The property tax rate in that county would be $1 million divided by $100 million, which makes it 1%.

Value of the Property

Property tax assessors estimate the value of your property based on the following:

  1. Sales evaluation—Evaluating the property based on its size, location, and overall condition and comparing it to other similar properties in the neighborhood
  2. Cost method—Estimating the value of your property based on how much it would cost to replace it
  3. Income method—Determining property’s value based on how much income you would make from the property if you were to rent it

Your local tax assessor’s office will determine the value of your property, which can be:

  • Appraised—a fair market value of the property
  • Assessed—the dollar assigned value for taxation purposes

Property Tax Exemptions

Every state or county provides eligible citizens a way to lower their property taxes in the form of property tax exemptions and relief programs. Usually, these programs offer partial or full exemption from paying property taxes for categories such as seniors, veterans, disabled people, or surviving spouses.

The most commonly offered is a homestead exemption—a property tax relief program for eligible citizens who use their property as their primary place of residence.

How to calculate property tax with homestead exemption or any other tax relief program? Easily—subtract the exemption amount from the assessed value of the property. Let’s say that a property is worth $300,000, and the owner is eligible for a $50,000 exemption—the taxable value of their property is $250,000.

What Are the Most Common Property Tax Exemptions?

What property tax exemptions are available depends on your state of residence. Some states may offer up to 10 different exemptions, while others may offer one. 

In the following table, you can find some of the most common property tax exemptions and their brief descriptions:

Property Tax Exemption


Homestead exemptionThis exemption is intended for homeowners who use their property as their primary residence. There are usually no criteria related to the age or income
Senior citizens exemptionThese programs are usually available for citizens that are 65 years old or older and meet the income eligibility criteria set by their state of residence
Disability exemptionThis type of property tax exemption is available for blind and disabled citizens. The exact criteria differ from one state’s program to another
Veterans exemptionMost states offer property tax relief for disabled veterans injured in the line of duty while serving in the U.S. Armed Forces. Some states consider all veterans eligible for this exemption, regardless of disability

Eligibility criteria for property tax exemptions vary significantly across the states. If you can’t determine whether you are eligible for an exemption in your state, sign up for DoNotPay and find out without hassle.

Discover Your Eligibility for Property Tax Exemptions With DoNotPay

Are you not sure how to file a property tax appeal? Do you need help paying your taxes? You’re in luck—DoNotPay can generate a unique property tax guide to help you resolve all the issues you have!

Here’s what you can find in your personalized guide:

  • Instructions on negotiating with your local tax assessor
  • Tips on lowering your property taxes
  • Evidence you need for appealing past assessments

You can use our learning center to find out what the states with low property taxes are and where the taxpayers pay an arm and a leg for the properties they own.

We can determine if you’re eligible for a property tax exemption in your state, and here’s how:

  1. Fire up DoNotPay
  2. Open the Property Tax feature
  3. Answer our chatbot’s questions about the property you own

Once you submit your answers, DoNotPay will provide a customized guide for you.

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