What Is a Mill Levy?
A mill levy is a property tax rate expressed in “mills.” One mill equals one dollar of tax for every $1,000 of a property’s taxable (assessed) value. Local taxing authorities—school districts, counties, cities, special districts—set mill rates based on the revenue they need to fund services such as schools, roads, parks and public safety.
Key Takeaways
– A mill = $1 of tax per $1,000 of assessed value (0.001 or 0.1%).
– Multiple jurisdictions each set mills; the sum of those rates is your total mill levy.
– Taxable (assessed) value is often a percentage of market value after exemptions.
– Mill levies and assessed values together determine your annual property tax bill.
Sources: Investopedia; Tax Foundation.
How Mill Levies Work
1. Budget needs: Each taxing body estimates how much revenue it needs for the year.
2. Tax base: The jurisdiction totals the taxable value of all properties within its boundaries.
3. Rate setting: Required revenue ÷ total taxable value = tax rate (often converted to mills).
4. Combined levy: Each jurisdiction’s mill rate is added to create the total mill levy a property faces.
5. Tax due: The total mills are applied to your property’s assessed value to compute your tax.
Fast Fact
A 1,000-mill levy would equal a 100% tax on assessed value (1,000 × $1 per $1,000 = assessed value). Typical total mill levies are much lower (commonly a few dozen to a few hundred mills depending on location and services).
Example of a Mill Levy (illustrative)
– Total taxable property value in an area = $1,000,000,000.
– School district needs $100,000,000 → levy = 100,000,000 ÷ 1,000,000,000 = 0.10 (100 mills).
– County needs $10,000,000 → levy = 0.01 (10 mills).
– City needs $50,000,000 → levy = 0.05 (50 mills).
– Combined levy = 0.16 (160 mills).
If your property’s assessed value = $100,000, tax = (160 mills ÷ 1,000) × $100,000 = 0.16 × $100,000 = $16,000.
How Is the Mill Levy Calculated? — Practical steps and formulas
Step 1 — Find your property’s market value and the assessment ratio:
– Market value = estimated fair market sale price.
– Assessment ratio = percentage used by your jurisdiction to convert market value to assessed (taxable) value. Some areas use 100%; others use a lower percentage.
Step 2 — Calculate assessed (taxable) value:
Assessed value = Market value × Assessment ratio − any exemptions (homestead, veteran, etc.)
Step 3 — Find the total mill levy:
Total mills = sum of mills from all taxing authorities listed on your local tax bill or assessor’s website.
Step 4 — Compute property tax:
Property tax = (Total mills ÷ 1,000) × Assessed value
Or equivalently: Property tax = Total mills × (Assessed value ÷ 1,000)
Example (more typical numbers):
– Assessed value = $200,000
– Total mill levy = 25 mills
Tax = (25 ÷ 1,000) × $200,000 = 0.025 × $200,000 = $5,000
Are Mill Levies Applied to Personal Property?
Yes, in many jurisdictions significant personal property (e.g., motor vehicles, boats, business equipment) can be assessed and taxed using mill levies. The rules vary by state and locality—some personal property is exempt or taxed differently. Check your state/county assessor’s policies for specifics.
How Often Is the Mill Levy Rate Adjusted?
Mill levies can be adjusted annually or whenever local jurisdictions set new budgets. Common drivers of changes:
– New budget needs or capital projects
– Changes in total assessed property values (shifts in the tax base can raise or lower required mills)
– Voter-approved increases (bond measures, levies)
Adjustments normally follow a public process (budget hearings, board/council votes, sometimes ballot measures).
Practical steps for homeowners — How to find, estimate, and manage your mill levy and taxes
1. Find your mill levy and assessed value:
– Look at your most recent property tax bill (it lists mills and assessed value).
– Visit your county assessor or treasurer website; many publish mill rates by jurisdiction.
– Contact the assessor’s office if you can’t find the info online.
2. Estimate your tax quickly:
– Get market value → apply assessment ratio and exemptions → multiply assessed value by (total mills ÷ 1,000).
3. Check for exemptions and credits:
– Common ones: homestead, senior, veteran, disability, agricultural, energy-rebate credits. Apply early—some require annual filings.
4. Appeal your assessed value if necessary:
– Review comparable sales and valuation methodology.
– File an appeal with the assessor’s office by the local deadline (procedures and deadlines vary).
– Attend hearings with evidence (appraisals, comps, photos).
5. Understand timing and payment:
– Note billing cycles, installment options, and penalties for late payment.
– Watch for proposed mill changes during local budget cycles and public hearings.
The Bottom Line
A mill levy is the local property tax rate expressed in mills (dollars per $1,000 of assessed value). Your property tax bill depends on three things: the property’s market value, the assessment rules/exemptions that produce taxable value, and the combined mill levy set by local taxing authorities. To estimate or reduce your tax bill, verify assessed value and exemptions, monitor local mill rate changes, and use the appeal process when valuations look incorrect.
Sources
– Investopedia, “Mill Levy” (https://www.investopedia.com/terms/m/mill-levy.asp)
– Tax Foundation, “How to Calculate Property Tax Liability” (Tax Foundation guidance on property tax calculation)
If you want, I can:
– Estimate your property tax if you give market value, assessment ratio, exemptions and total mills.
– Help locate your county assessor website or explain how to file an appeal in your state.