ABA Family Legal Guide

Buying and Selling a Home

Tax Considerations

Tax Considerations When Buying Your Home

How are real estate taxes determined?

The most common way of determining real estate taxes consists of two steps. The taxing body determines the total value of all real estate within its borders (assessments). It then takes the budgets (spending plans) of the various governmental units for which it collects taxes and adds them up. The ratio of budgets to assessments creates a tax rate, which is then multiplied by your own assessment.