Property Tax

Rarely. Property taxes can increase for three reasons: the local government raises the millage rate to fund a new project (like a school), your home’s value is reassessed upward due to market growth, or you made physical improvements (like adding a deck or a pool) that increased the home’s value.

Yes. If you believe your home’s assessed value is higher than its actual market value, you can file an appeal. In 2026, most counties have a specific “appeals window” (often in the spring) where you can present evidence—such as recent sales of similar homes or a private appraisal—to argue for a lower valuation and a smaller tax bill.

Almost every jurisdiction offers “Tax Exemptions” that reduce your taxable value. The most common is the Homestead Exemption, which is available if the home is your primary residence. Other 2026 programs include:

• Senior Citizen Exemptions: For homeowners over age 65.

• Veterans Exemptions: For those who have served in the military.

• Disability Exemptions: For homeowners with qualifying permanent disabilities.

During the homebuying process, most lenders will require you to set up an escrow account. Each month, you pay 1/12th of your estimated annual property tax bill along with your mortgage. The lender holds this money in a neutral account and pays the county directly when the tax bill is due. This ensures you never miss a payment, but it means your monthly mortgage payment can fluctuate if the county raises tax rates.

With the standard deduction for 2026 rising to approximately $15,750 for single filers and $31,500 for married couples, you should only itemize if your total deductions (including property taxes, mortgage interest, and charitable gifts) exceed those amounts. Because the SALT cap was raised to $40,000, more homeowners in high-tax states may find it beneficial to itemize in 2026 than in previous years.

Yes, but there are new limits to be aware of. Under the “One Big Beautiful Bill” (OBBBA) passed in 2025, the cap on State and Local Tax (SALT) deductions—which includes property taxes—has been increased. For the 2026 tax year, most filers can now deduct up to $40,000 in combined state and local taxes (up from the previous $10,000 limit), though this amount may phase out for very high-income earners.

Don’t rely solely on the seller’s current tax bill. When a home sells, it often triggers a “reassessment.” In many states, the new assessed value will be based on your purchase price, not the seller’s old valuation. To estimate correctly, multiply your expected purchase price by the local tax rate (usually between 1% and 2.5% in the U.S.) to avoid a surprise spike in your monthly escrow payment.

This is a critical distinction in the homebuying process.

• Market Value: What a buyer would pay for your home today.

• Assessed Value: The value the county uses to calculate taxes (often lower than market value).

• Taxable Value: The final number used for your bill after subtracting any exemptions (like a Homestead Exemption). In 2026, your taxable value is the figure that actually determines your out-of-pocket cost.

The math behind your tax bill follows a specific formula: Assessed Value × Millage Rate = Annual Property Tax.

• Assessed Value: This is the dollar value assigned to your home by a local assessor (often a percentage of the market value).

• Millage Rate: Also known as the “mill rate,” this represents the amount of tax you owe for every $1,000 of your home’s value. For example, a mill rate of 10 means you pay $10 for every $1,000 of assessed value.

Property taxes are “ad valorem” taxes, meaning they are based on the value of the real estate you own. These taxes are levied by local government entities—such as your county, city, and school district—to fund essential community services. In 2026, your tax dollars typically support public schools, police and fire departments, road maintenance, and local park systems.