# Property tax

> Property tax is a local tax on real estate based on its assessed value, usually paid through mortgage escrow. How the bill is figured and how rates vary.

URL: https://mortgage-math-us.com/glossary/property-tax/  
Last reviewed: 2026-10-29 · By the MortgageMath US Editorial team

## Quick answer

**Property tax** is a tax that local governments — typically counties, cities and school districts — charge on real estate based on its assessed value. With a mortgage it is usually paid through an [escrow account](https://mortgage-math-us.com/glossary/escrow-account/) as part of your monthly payment.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| US effective property tax rate | 0.89% | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) | 2024 ACS 1-year |
| US median property tax bill | $3,211/yr | [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) | 2024 ACS 1-year |

## How the bill is figured

The assessor sets a taxable value for the home; each taxing body applies its rate (often quoted in mills, or dollars per $1,000); and exemptions such as a [homestead exemption](https://mortgage-math-us.com/glossary/homestead-exemption/) reduce the taxable value or the bill. Assessments and rates can change every year, so the tax part of your [PITI](https://mortgage-math-us.com/glossary/piti/) can change too.

Nationally, homeowners pay a median of $3,211 a year, an effective rate of 0.89% of home value. On a $361,000 home, that rate works out to $3,213 a year.

## How much it varies by state

Across the states and DC, the effective rate is highest in [Illinois](https://mortgage-math-us.com/location/illinois/) at 1.92% and lowest in [Hawaii](https://mortgage-math-us.com/location/hawaii/) at 0.27%. On the same $361,000 home, that is $6,931 a year versus $975. Rates also vary widely between counties within a state. See [how property taxes change your payment](https://mortgage-math-us.com/blog/how-property-taxes-change-your-payment/), and use the [mortgage payment calculator](https://mortgage-math-us.com/tools/mortgage-payment-calculator/) with your local rate.

## Sources

- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) — Effective property tax rate (median taxes ÷ median home value); Median real estate taxes paid by homeowners (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=040XX00US17) — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=040XX00US15) — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- [CFPB: Mortgage key terms (property taxes)](https://www.consumerfinance.gov/consumer-tools/mortgages/answers/key-terms/)

_General information, not financial advice._