Mill Rate
A tax rate used to calculate property taxes, expressed as the amount of tax per $1,000 of assessed property value. One mill equals one-tenth of one cent, so a mill rate of 20 means $20 in taxes for every $1,000 of assessed value. Local governments set mill rates annually to generate revenue for public services like schools, police, and infrastructure.
Example
“With a mill rate of 15.2, the homeowner will pay $15.20 in property taxes for every $1,000 of assessed property value.”
Memory Tip
A mill grinds grain into tiny pieces, just like the mill rate breaks your property value into tiny tax pieces (thousandths).
Why It Matters
Understanding mill rates helps property owners calculate their annual tax burden and budget accordingly. Changes in mill rates directly affect property ownership costs and can impact property values in different jurisdictions.
Common Misconception
Many homeowners think mill rates are the same everywhere, but they vary significantly by location based on local government funding needs and property values.
In Practice
If your home is assessed at $300,000 and your area's mill rate is 15, your annual property tax would be $4,500 ($300,000 ÷ 1,000 × 15). When comparing homes in different towns, a lower purchase price might be offset by a higher mill rate.
Etymology
The term "mill" comes from the Latin "millesimum" meaning one-thousandth, as the rate was historically expressed as mills per dollar (one mill = 1/10 of a cent).
Common Misspellings
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