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Property taxes are calculated using the actual value of the property, the assessment rate, and the mill levy.
Statute provides that the actual value of property is not the taxable value. Rather, the taxable value is a percentage of the actual value. The percentage is called an “assessment rate,” and the resulting value is called the “assessed value.” With the repeal of the Gallagher Amendment in 2020, the multi-family and residential assessment rate was frozen at 7.15%. In 2024, House Bill HB24B-1001 assessment rates were set for tax years 2024 through 2027.
The 2023 & 2024 exemption of the first $55,000 of actual residential value and first $30,000 of actual improved commercial value has expired and is no longer applicable in 2025.
The actual value of Mr. Brown’s home is $500,000. The current assessment rate is 7.05% for School Districts & 6.25% for Local Governments. The mill levy is 100.000 total mills.
Actual Value x School Assessment Rate = School Assessed Value
Actual Value x Local Government Assessment Rate = Local Government Assessed Value
$500,000 Actual Value x 7.05% Assessment Rate = $33,250 School Assessed Value
$500,000 Actual Value x 6.25% Assessment Rate = $31,250 Local Government Assessed Value
To determine the property tax, multiply the assessed values times the decimal equivalents of the total mill levy. A mill is equal to 1/1000 of a dollar. A tax rate is the mill levy expressed as a percentage. Thus 100.0 mills = 10.000% or 0.1000 as the decimal equivalent.
For a split assessment rate, the mill levy must also be split and calculated separately. The estimate below uses 45.528 mills for the school district and 54.472 mills for the local government.
If Mr. Brown’s assessed value is $33,250 (School) & $31,250 (Local Government), his taxes will be:
School Assessed Value x (Mill Levy / 1,000) = School Taxes
Local Government Assessed Value x (Mill Levy / 1,000) = Local Government Taxes
School Taxes + Local Government Taxes = Total Taxes
$33,250 School Assessed Value x (45.528 Mill Levy / 1,000) = $1,604.86 Taxes
$31,250 Local Government Assessed Value x (54.472 Mill Levy / 1,000) = $1,702.25 Taxes
$1,604.86 School Taxes + $1,702.25 Taxes Local Gov Taxes = $3,307.11 Total Taxes
The actual value of Ms. Green’s vacant land parcel is $150,000 with an assessment rate of 27% and a mill levy of 100.000.
Actual Value x Assessment Rate = Assessed Value
$ 150,000 Actual Value x 27% Assessment Rate = $40,500 Assessed Value
To calculate the property tax for Ms. Green’s land, multiply the assessed value times the decimal equivalent of the total mill levy. A mill is equal to 1/1000 of a dollar. A tax rate is the mill levy expressed as a percentage. Thus 100.000 mills = 10.000% or .1000 as the decimal equivalent.
If Ms. Green ’s assessed value is $41,850, her taxes will be:
Assessed Value x Mill Levy = Taxes
$ 41,850 Assessed Value x (100.000 Mill Levy / 1,000) = $4,185 Taxes
The actual value of Widget LLC’s commercial parcel is $5,000,000 with an assessment rate of 27% and a mill levy of 100.000.
Actual Value x Assessment Rate = Assessed Value
$5,000,000 Actual Value x 27% Assessment Rate = $1,350,000 Assessed Value
To calculate the property tax for Widget Company LLC, multiply the assessed value times the decimal equivalent of the total mill levy. A mill is equal to 1/1000 of a dollar. A tax rate is the mill levy expressed as a percentage. Thus 100.000 mills = 10.000% or .1000 as the decimal equivalent.
If Widget LLC’s assessed value is $1,350,000 her taxes will be:
Assessed Value x Mill Levy = Taxes
$1,350,000 Assessed Value x (100.000 Mill Levy / 1,000) = $135,000 Taxes