How to calculate mills in real estate

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Mills to dollars calculator

Introduction to Property Taxes and Mill Rates

Introduction to property

Property taxes are a fundamental source of revenue for local governments, providing the necessary funds for public services such as education, police and fire protection, and infrastructure maintenance.

The amount of property tax owed is determined by the property's assessed value and the mill rate. A mill rate is the amount of tax payable per dollar of the assessed value of a property. One mill represents one-tenth of a cent, or $1 for every $1,000 of assessed value.

From the perspective of a homeowner, understanding mill rates is crucial as it directly affects their annual tax bill.

For example, if a home is assessed at $200,000 and the mill rate is 20 mills, the property tax owed would be $4,000 annually. This is calculated by multiplying the assessed value ($200,000) by the mill rate (20 mills, or 0.020), as shown in the formula: $$ Property\ Tax = Assessed\ Value \times Mill\ Rate $$.

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