Property Taxes — Ad Valorem Taxes

Property taxes are ad valorem taxes — meaning "according to value." They are a primary source of revenue for local governments and schools.

How property taxes are calculated:

Assessed Value × Mill Rate = Annual Tax

Mill rate: Tax per $1,000 of assessed value. 1 mill = $0.001 (one-tenth of one cent).

Example: Assessed value $200,000 × mill rate 20 (2%) = $4,000/year

Assessed value vs. market value:

Assessed value is set by the tax assessor — often a percentage of market value (the assessment ratio).

Example: 80% assessment ratio on $300,000 home = $240,000 assessed value

Exemptions that reduce taxable value:

Homestead exemption — reduces assessed value for primary residence

Senior citizen exemption

Veterans exemption

Disability exemption

Tax lien: Unpaid property taxes become a lien on the property — priority lien over almost all others including mortgage liens.

Reference:

Wikipedia: Property Tax

https://en.wikipedia.org/wiki/Property_tax