Property taxes are levied by local governments and are the primary funding source for public schools, fire departments, roads, and other community services. The amount you owe is determined by multiplying your property's assessed value by the local mill rate set by your county or municipality.

A mill rate represents the amount of tax per $1,000 of assessed value. For example, a mill rate of 25 means you pay $25 for every $1,000 of assessed value. Mill rates vary significantly by location, so it is important to know your specific local rate rather than relying on national averages.

Property taxes are typically deductible on your federal income tax return up to $10,000 combined with state and local income taxes under the SALT deduction cap. Homeowners should also be aware that assessed values can be appealed if they believe their assessment is too high compared to similar properties in their area.