Mill Rate

Mill Rate: How Property Taxes Are Calculated

Key takeaways
* A mill (or millage) equals 1/1,000 of currency value: 1 mill = $1 of tax per $1,000 of assessed property value.
* Property tax = (Mill rate × Taxable assessed value) ÷ 1,000.
* Multiple taxing authorities (city, county, school district, special districts) each set mill rates that are summed to produce your total mill rate.
* Mill rates can vary by property type and change annually when budgets and assessments are updated.

What is a mill rate?
The mill rate (millage rate) is the tax rate used to calculate property taxes. It expresses the amount of tax payable per $1,000 of a property’s taxable assessed value. For example, a mill rate of 7 means $7 in tax for every $1,000 of assessed value.

How mill rates are set
Local governments determine mill rates after budgetary needs are calculated:
1. Total the budgeted expenses for services (schools, infrastructure, emergency services, etc.).
2. Subtract known revenues (state aid, fees, grants).
3. The remaining amount to be raised through property tax is divided by the total assessed value of taxable property in the jurisdiction and multiplied by 1,000 to produce the mill rate.

Because different jurisdictions levy taxes, each jurisdiction’s mill rate is added together to create the total mill rate applied to a property.

How to calculate your property tax
Use this formula:
Property tax = (Mill rate × Taxable assessed value) ÷ 1,000

Example:
If the total mill rate is 7 and your taxable assessed value is $150,000:
Property tax = (7 × 150,000) ÷ 1,000 = $1,050

Note: “Taxable assessed value” may be the full assessed value or an assessed fraction of market value, depending on local assessment rules and any exemptions.

Converting mills to a percentage
One mill = 0.1% (0.001). To convert mills to a percent:
Percent = Mill rate × 0.1
Example: 12 mills = 12 × 0.1 = 1.2%

Factors that influence mill rates and tax bills
* Assessment method: Some jurisdictions tax a percentage of fair market value (assessment ratio).
* Property type: Residential, commercial, and industrial properties may be taxed at different rates.
* Local budgets: Higher spending needs increase mill rates if other revenues don’t cover costs.
* Exemptions and abatements: Homestead exemptions or other deductions reduce taxable value.
* Reassessments: Annual or periodic reassessments can change taxable values.

Common adjustments and protections
* Homestead exemptions: Reduce the portion of a home’s value subject to tax (e.g., exclude $50,000 from taxable value).
* Assessment appeals: If you believe your assessment is too high, most jurisdictions allow appeals or reassessment requests.
* Special districts: Additional levies (e.g., fire, library, school) can add mills to your bill.

How to find your mill rate
* Check your local tax assessor or municipal finance office website.
* Look at your property tax bill or property deed for the combined mill rate.
* Contact the local assessor’s office for a breakdown of the mills charged by each taxing authority.

Practical tips
* Confirm whether the listed value is assessed value or taxable value after exemptions.
* Review annual assessment notices and compare to local market trends.
* Explore available exemptions or tax relief programs (senior, disabled, veterans).
* If your bill jumps unexpectedly, ask the assessor for an explanation of changes to mill rates or assessed value.

Bottom line
The mill rate is a straightforward way to express property tax liability: dollars of tax per $1,000 of taxable assessed value. Understanding how mills are set, how they convert to percentages, and how assessments and exemptions affect taxable value lets you estimate your property tax and identify opportunities to challenge or reduce it.