What property taxes are

• ✺Property taxes are an ongoing cost of homeownership that doesn't disappear once the mortgage is paid off.
• ✺Underestimating property taxes can throw off your homeownership budget significantly.
• ✺Unpaid property taxes can eventually lead to serious consequences, including a tax lien or foreclosure by the taxing authority.

Assessed value

The value a local government assigns to a property for the purpose of calculating property taxes.

Millage rate

The tax rate applied to a property's assessed value, often expressed per $1,000 of value.

Homestead exemption

A reduction in taxable value offered in some states for a homeowner's primary residence.

Tax lien

A legal claim a government can place on a property for unpaid taxes.

• ✗Forgetting to budget for property taxes when estimating total homeownership costs.
• ✗Not checking whether you qualify for a homestead or other exemption in your area.
• ✗Assuming property taxes are fixed and won't change after a reassessment.
• ✗Ignoring a property tax bill, which can eventually lead to a lien or other serious consequences.

• !Property tax rates and assessment schedules differ significantly by state, county, and sometimes city.
• !Many states offer a homestead exemption or similar reduction for a primary residence — check your local assessor's office for specifics.
• !If you disagree with your property's assessed value, most areas have a formal appeal process.
• !If taxes are escrowed through your mortgage, a reassessment can change your monthly mortgage payment, not just an annual bill.

• Property taxes are local taxes based on a property's assessed value, funding schools and local services.
• They're calculated using a local tax rate applied to the assessed value, which varies by location.
• Many homeowners pay through a mortgage escrow account rather than directly.
• Exemptions may be available depending on where you live and your circumstances.

Totally optional. Nobody's grading you.

1. 1.Look up your local assessor's office website to check your property's assessed value and tax rate.
2. 2.Ask about homestead or other exemptions you might qualify for.

Related lessons:

• How much buying a home actually costs
• Understanding escrow
• What homeowners insurance is

• Property taxes and your mortgage
  Consumer Financial Protection Bureau (CFPB)(opens in a new tab)
• Property tax basics
  Internal Revenue Service (IRS)(opens in a new tab)