Calculating Your Homesteaded Property Taxes

Hi Prospects & Friends!

If you own a property and are using exemptions, its always wise to know how to calculate the property taxes. To go about on how to do this see the equation and example below;

Peter is buying a property for himself, because he saved some money for down payment, and finally gets approved on a FHA loan. Peter wants to know in advance the yearly taxes on the property he is buying, before he sees it with the real estate broker, because this will help Peter on budgeting his costs for his home. Peter just doesn't want to wait for the agent to get him the number, or see it when the title company escrows his account and provides him a HUD-1 statement at closing. So Peter uses the equation:

Appraised Value x Exemption Rate x Jurisdiction Rate / 100 per assessed value = annual taxes. Lets look deeper into this equation with some numbers for better understanding;

Appraised Value is the value you pay taxes on and is given to you annually from your county appraisal district

Exemption Rate is the rate you're entitled to if you have any exemptions like a homestead

Jurisdiction Rate is the rate you pay for each taxing entity taxing you on your home

100 per assessed value just means you will be paying $100 per your assessed tax rate

So Peter goes online to his county appraisal district and gets his numbers.

Appraised Value = $175,000

School exemption is 20% and he gets $40,000 homestead amount = $75,000 ($175,000 x 20% = $35,000 + $40,000) The school rate is 1.31 so now Peter calculates $175,000 - $75000/100 x 1.31 = $1,310 he will owe his school district for that year.

Jurisdiction Rates are at 20% each with each additional taxing entity totaling 6 of them

Tax entity 1 homestead rate 20%, tax rate 0.37 = $518 ($175,000 x 20% = $35,000), ($175,000 - $35,000 / 100 x 0.37 = $518)

Tax entity 2 homestead rate 20%, tax rate 0.033 = $46.20

Tax entity 3 homestead rate 20%, tax rate 0.009 = $12.60

Tax entity 4 homestead rate 20%, tax rate 0.16 = $224

Tax entity 5 homestead rate 20%, tax rate 0.005 = $7

Tax entity 6 homestead rate 20%, tax rate 0.55 = $770

So Peter calculates his projected annual taxes for his home himself as $2,887.80 which will project his monthly tax payment added to his mortgage in the amount of $240.65 in taxes per month. Peter is happy he was able to calculate his own projected property taxes for his home, and sees the taxes do fall in his budget of under $3,500 per year. So in conclusion Peter has cushion, and knows in order to minimize his property tax monthly payment, he needs to keep looking at homes below $200,000 in this are zoned to these jurisdictions since the numbers work. You can find the jurisdiction rates, appraised value, and exemption rates all at your county appraisal district website. Enjoy now you know how to calculate your own annual projected property taxes, without help or assistance.