Property Taxes 101

The tax is known as the mill levy. A mill is .1 cent (a tenth of a cent). The property tax is expressed in terms of mills levied for each dollar of assessed valuation of property. One-tenth of a mill per dollar works out to 10 cents per $100 in assessed valuation, or $1 per $1,000 in valuation.

This is the formula for figuring the tax:

Mill levy = the taxes to be collected divided by the assessed valuation

So let's say budget officials estimate that $1 million will have to be collected from the property tax and that the assessed value of real estate in your city is $80 million. This is how the tax is figured:

Mill levy = $1 million divided by $80 million

Mill levy = $1 divided by $80 = $.0125

Mill levy = 1.25 cents on each $1 of assessed valuation.

Mill levies are usually expressed against $100 or $1,000 in assessed valuation. So the levy in this city would be $1.25 for each $100 in valuation, or $12.50 for each $1,000 in valuation.

The mill levy is applied to assessed valuations, not to actual market value of the property. Assessed value is usually a percentage of the market value.

Courtesy of News Reporting and Writing by Melvin Mencher