What Is a Millage Rate in Real Estate?

A millage rate is the tax rate used to calculate property taxes in many states and counties. The term “mill” represents one-tenth of one cent or 0.001. Local governments—such as counties, cities, school districts, and special taxing authorities—use millage rates to determine how much tax a property owner must pay annually.

How Millage Rates Work

Millage rates are applied to the assessed value of a property to determine tax owed. Each taxing authority sets its own rate, and the total rate is the sum of all applicable mills.

1 mill = $1 of tax per $1,000 of assessed value

  • Assessed value — determined by the local tax assessor
  • Total millage rate — combined mills from all taxing bodies
  • Annual tax bill — assessed value × millage rate

Millage Rate Formula

Property Tax = (Assessed Value / 1,000) × Millage Rate

Example:

  • Assessed Value: $350,000
  • Total Millage Rate: 18 mills

Tax = (350,000 ÷ 1,000) × 18 = $6,300 per year

Higher millage rates mean higher property taxes, even if assessed values remain stable.

Why Millage Rates Matter in Real Estate

  • Buyer affordability: Taxes affect mortgage payments and qualifying ratios.
  • Sellers: Local millage rates influence buyer demand and carrying costs.
  • Investors: Tax burdens impact NOI, cap rates, and long-term returns.
  • Market comparison: Millage rates vary widely between neighborhoods and counties.

Understanding millage rates helps buyers compare tax burdens and sellers provide accurate MLS listing details.

Millage Rates and FSBO Sellers

Property taxes calculated using millage rates appear on closing statements and MLS property details. FSBO sellers should know:

  • How millage rates affect yearly ownership costs
  • How taxes are prorated at closing
  • How to disclose accurate tax information to buyers

Listing through Brokerless ensures your MLS listing includes correct tax fields and avoids compliance issues.

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