How does mill rate work

An assessor appointed by the local government evaluates the property every one or five years—depending on the municipality—and determines its assessed value. This value is only used to calculate property taxes. A homeowner's annual property taxes are calculated using the property's tax assessed value, and the total assigned millage rate. A home's tax assessed value is a percentage of its market value. Millage also impacts the property's tax assessed value as mills are assigned by the municipality.

Millage depends, in part, on the level of services that the property uses from the town or municipality. Each public service charges a certain amount of tax millage to property owners for the use of their services. Several taxing authorities—each with millage rates—combine their rates to calculate the total tax liability of a property.

These entities include counties, municipalities, emergency services districts, community colleges, and school boards. If we use the example above, the millage rate is likely a combination of several millage rates imposed by different taxing authorities.

For example, the county charges 20 mills, the municipality charges 15 mills, the emergency services district charges ten mills, the local community college charges ten mills, and the school board charges 15 mills, with the sum of the rates totaling 70 mills.

Property Tax. Real Estate Investing. Purchasing A Home. Your Privacy Rights. Calculating Tax Rate In calculating a property tax rate, the Portland City Council determines the amount of revenue needed to be raised by the property tax to fund all of our municipal services.

That amount is then divided by the total local assessed valuation to get the local tax rate. Percentage Value Another way to look at the mill rate is as a percentage of value. A tax commitment listing all the property in town, its value and the taxes that are owed is then signed by the municipal officers and given to the tax collector who sends out the tax bills. In Portland, property taxes are paid in two installments due in September and March.

Grey menus Share. Mil Rate Calculation. The calculation expressed as an equation is as follows: amount to be raised. Property Tax. Real Estate Investing. Purchasing A Home. Your Privacy Rights. To change or withdraw your consent choices for Investopedia.

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We and our partners process data to: Actively scan device characteristics for identification. I Accept Show Purposes. Your Money. Personal Finance. Your Practice. Popular Courses. Part Of. Taxes Property Tax. What Is the Mill Rate? Key Takeaways Mill rate is a tax rate—the amount of tax payable per dollar of the assessed value of a property.