Selling
Understanding property taxes
Property tax is assessed value multiplied by the local tax rate, minus any exemptions. Both inputs change, and after a sale they often change together.
For buyers this is the most commonly underestimated line in monthly cost. A property reassessed to its purchase price can produce a bill hundreds of dollars a month above the seller's.
- What this is
- An explanation of how property tax bills are calculated and why they change.
- Who it is for
- Buyers budgeting monthly cost, owners reviewing an assessment, and investors underwriting expenses.
- The problem
- Buyers budget using the seller's current tax bill, which may be based on an assessment set years before the sale.
- What happens next
- Confirm the assessment method for the jurisdiction, then model the payment at the reassessed figure.
How the bill is built
The assessor sets an assessed value, which in some jurisdictions is market value and in others a fixed percentage of it. Local taxing bodies — municipality, county, school district — each levy a rate, expressed as a millage or per-thousand figure.
Exemptions such as homestead, senior, veteran or agricultural reduce the taxable base. Many are not transferable, which is why an inherited bill can be misleading.
Reassessment after a sale
Some jurisdictions reassess on transfer, some on a fixed cycle, and some cap annual increases for owner-occupants only. The rules matter enormously to what you will actually pay.
Before you commit, confirm the jurisdiction's practice and model the payment at the reassessed value rather than the current bill.
Appealing an assessment
You appeal the assessed value, not the tax rate. The strongest evidence is comparable sales below your assessment, or a factual error in the record such as incorrect square footage or bedroom count.
Deadlines are strict and usually annual. A successful appeal lowers the bill for future years, which compounds meaningfully over a hold period.
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Will my property taxes go up after I buy?
In many jurisdictions yes, because the sale triggers a reassessment near your purchase price and any exemptions the prior owner held do not transfer. Check the local rule before you budget.
How are property taxes calculated?
Assessed value multiplied by the combined local tax rate, less exemptions. Assessed value may equal market value or a set percentage of it depending on your state.
What is a millage rate?
Tax per thousand dollars of assessed value. A rate of 25 mills on a $300,000 assessment produces a $7,500 annual bill before exemptions.
Can I appeal my property tax assessment?
Yes, within your jurisdiction's annual window. Bring comparable sales below your assessed value or documentation of an error in the property record.
Are property taxes deductible?
State and local taxes including property tax are deductible for itemizers, subject to the federal cap. Investment property taxes are an operating expense against rental income.
What is an escrow account?
An account your lender uses to collect taxes and insurance monthly and pay them when due. Your payment changes when the bill does, which is why escrow shortages appear after reassessment.
Want this answered for one property?
Property Intelligence™ applies this to a specific address using public records, uploaded documents, comparable sales and professional review — and states plainly what is known, what is missing and what to do next.
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Last reviewed August 3, 2026. Educational information, not financial or legal advice.