Property Tax Glossary
Key terms explained in plain English. Understand your property tax bill and what you can do about it.
Assessed Value
The dollar value assigned to your property by the county assessor for tax purposes. This is the number your property tax is calculated from. It may or may not equal what your home would actually sell for (market value).
Example: If your assessed value is $350,000 and the tax rate is 1.2%, your annual tax is $4,200.
Fair Market Value (FMV)
What a willing buyer would pay a willing seller for your property in an open market. If your assessed value is higher than your fair market value, you're over-assessed and can appeal.
Example: Your home is assessed at $400K but similar homes nearby sold for $340K-$360K. Your FMV is ~$350K — you're over-assessed by $50K.
Mill Rate / Millage
The tax rate expressed in 'mills' — one mill equals $1 of tax per $1,000 of assessed value. A rate of 30 mills means you pay $30 per $1,000 of assessed value.
Example: 30 mills × $300,000 assessed value ÷ 1,000 = $9,000 annual tax.
Effective Tax Rate
The actual percentage of your home's market value that you pay in taxes annually. Calculated as: annual tax ÷ market value × 100. This accounts for any assessment ratios or exemptions.
Example: You pay $4,000/year on a home worth $400,000. Effective rate = 1.0%.
Homestead Exemption
A reduction in your taxable assessed value available to owner-occupied primary residences. The amount varies by state — from $7,000 (California) to $100,000 (Texas school district).
Example: In Georgia, the standard homestead exemption reduces your appraised value by $30,000, saving ~$360/year.
Property Tax Appeal
A formal request to your county to lower your assessed value because it exceeds your property's actual market value. You provide comparable sales as evidence.
Example: You file an appeal showing 5 similar homes sold for less than your assessed value. The county reduces your assessment, lowering your tax bill.
Comparable Sales (Comps)
Recent sales of similar properties near yours used as evidence of market value. Good comps should be similar in size, age, condition, and location — ideally within 0.5 miles and sold within the last 12 months.
Example: Three homes within 0.5 miles, similar sqft and age, sold for $310K-$340K. Median: $325K. That's your evidence for FMV.
Over-Assessment
When your county's assessed value for your property is higher than what the property would actually sell for. This means you're paying more tax than you should.
Example: Assessed at $400K but comps show market value of $340K = over-assessed by $60K. At 1.2% rate, you're overpaying ~$720/year.
Board of Equalization
A local body (often volunteer citizens) that hears property tax appeals. Different states call it different names: Board of Revision, Assessment Appeals Board, Board of Review, Value Adjustment Board.
Example: You present your comparable sales evidence at a 15-minute hearing. The board decides whether to reduce your value.
Notice of Assessment
The annual document from your county showing your property's new assessed value for the upcoming tax year. This triggers the appeal deadline — you typically have 30-60 days from this notice to file.
Example: You receive a notice in June showing your value went from $320K to $380K. You have 45 days to appeal if you disagree.
Reassessment / Revaluation
When the county updates property values, either annually or on a cycle (every 2-8 years depending on state). During reassessment, values can go up or down based on market conditions.
Example: Your county does reassessment every 4 years. In 2026, all properties are revalued. If your value jumps significantly, that's when to consider an appeal.
Contingency Fee
A payment model where you only pay if the service is successful. For property tax appeals, this means no fee unless your taxes are actually reduced. Typical contingency fees are 25-40% of first-year savings.
Example: Your appeal saves $1,000/year. At 20% contingency fee, you pay $200 one time and keep $800 this year plus the full $1,000 savings every year after.
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